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

Locking It In

A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This ensures that your interest rate won't rise during the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer spans usually costing more. A lending institution can agree to freeze an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

In addition to going with the shorter lock period, there are more ways you can get the best rate. The larger the down payment, the better the rate will be, since you will have more equity from the beginning. You could opt to pay points to improve your interest rate over the loan term, meaning you pay more up front. For a lot of people, this makes financial sense..

Foxfield Financial can walk you through the pitfalls of getting a mortgage. Give us a call: 720-598-8300.

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