Getting a Low Interest Rate
Looking for a mortgage loan? We can assist you! Call us at (303) 993-6358. Want to get started? Apply Online Now
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a specific number of points for you for a certain period of time while your application is processed. This keeps you from working through your whole application process and discovering at the end that the interest rate has gone up.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer ones usually costing more. The lender will agree to hold an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to opting for a shorter rate lock period, there are more ways you may be able to get the lowest rate. The bigger down payment you pay, the better the rate will be, because you will be starting with more equity. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you will come out ahead in the long run.
The Mortgage Network can answer questions about rate lock periods and many others. Give us a call at (303) 993-6358.