"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
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 of time during your application process. This ensures that your interest rate won't get higher while you are working through the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer ones typically costing more. A lender may agree to hold 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 Save on Interest
In addition to going with the shorter rate lock period, there are other ways you can attain the lowest rate. A bigger down payment will get you a reduced interest rate, since you'll have more equity from the beginning. You can pay points to improve your rate for the loan term, meaning you pay more up front. To many people, this makes financial sense..
Saab Mortgage can answer questions about rate lock periods & many others. Call us: 703-288-0777.
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