Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a certain number of points for you for a certain period while your application is processed. This keeps you from working through your whole application process and discovering at the end that the interest rate has gone up.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer period typically costing more. A lender will agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are other ways to get a better rate, besides going with a shorter rate lock period. A larger down payment will get you a lower interest rate, because you're starting out with a good deal of equity. You could opt to pay points to reduce your rate over the term of the loan, meaning you pay more up front. To a lot of people, this makes sense and is a good deal..

Foxfield Financial can walk you through the pitfalls of getting a mortgage. Call us at 7205988300.

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