Getting a Low Interest Rate
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a certain number of points for you for a specified period during your application process. This saves you from working through your entire application process and discovering at the end that the interest rate has gone up.
Although there can be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would have with a shorter period
Other Ways to Save on Interest
In addition to going with the shorter rate lock period, there are other ways you are able to get the best rate. A larger down payment will give you a lower interest rate, since you will have more equity at the start. You could opt to pay points to reduce your 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, especially if you keep the loan for a long time.
Carter Financial Solutions can walk you through the pitfalls of getting a mortgage. Give us a call at 866-840-8745 x2.