Getting a Low Interest Rate
Lock It In
A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a certain number of points for you for a specified period during your application process. This means your interest rate cannot go up as you are working through the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans typically costing more. The lending institution may agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
More Ways to Save on Interest
There are more ways to get a good rate, in addition to opting for a shorter rate lock period. The larger down payment you make, the better your rate will be, because you will be starting with more equity. You could opt to pay points to bring down your interest rate for the loan term, meaning you pay more up front. To many people, this is a good option..
At U.S.A. Lending, Inc., we answer questions about this process every day. Call us at 305-967-7200.