"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a particular number of points for you for a specified period during your application process. This saves you from going through your entire application process and finding out at the end that your interest rate has gone up.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period usually costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would with a shorter rate lock span of time
More Ways to Save on Interest
In addition to choosing the shorter lock period, there are more ways you can get the lowest rate. A larger down payment will result in a reduced interest rate, since you'll be starting out with a good deal of equity. You could choose to pay points to reduce your rate over the term of the loan, meaning you pay more up front. To many people, this makes sense and is a good deal..
U.S.A. Lending, Inc. can answer questions about rate lock periods and many others. Give us a call: 305-967-7200.