"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

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 of time during your application process. This keeps you from getting through your whole application process and learning at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans usually costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter period

Other Interest Saving Strategies

There are other ways to get a lower rate, in addition to choosing a shorter rate lock period. The larger down payment you pay, the better your rate will be, since you will be starting with more equity. You can pay points to bring down your rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will save money in the end.

American Mortgage Advisers, Inc can walk you through the pitfalls of getting a mortgage. Give us a call: 2148657442.