"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a certain number of points for you for a certain period during your application process. This means your interest rate cannot go up during the application process.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones generally costing more. The lending institution will agree to hold an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Ways to Save on Interest
There are more ways to get a lower rate, in addition to choosing a shorter rate lock period. The bigger down payment you make, the better the rate will be, since you will be entering the loan with more equity. You can pay points to reduce your rate for the life of the loan, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..
Saab Mortgage can answer questions about rate lock periods & many others. Call us at 703-288-0777.
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