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

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a particular number of points for you for a specified period during your application process. This keeps you from working through your entire application process and finding out at the end that your interest rate has gotten higher.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans usually costing more. A lending institution may agree to freeze an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a good rate, besides going with a shorter rate lock period. A bigger down payment will get you a lower interest rate, because you'll be starting out with more equity. You can pay points to reduce your interest rate over the life of the loan, meaning you pay more up front. For many people, this is a good option..

Foxfield Financial can answer questions about rate lock periods and many others. Give us a call at 720-598-8300.

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