"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 hold a certain interest rate and a certain number of points for you for a specified period while your application is processed. This means your interest rate will not rise during the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would have with a shorter period
Additional Ways to Save on Interest
In addition to going with the shorter rate lock period, there are several ways you are able to attain the best rate. The larger down payment you can pay, the better your rate will be, as you will be entering the loan with more equity. You could opt to pay points to lower your rate over the term of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the term of the loan. You'll pay more up front, but you will save money in the long run.
Carter Financial Solutions can walk you through the pitfalls of getting a mortgage. Call us at 8668408745.