Getting a Low Interest Rate
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Locking It In
A rate "lock" or "commitment" is a lender's promise to lock in a particular 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 will not rise as you are working through the application process.
Rate lock periods can vary in length, between 15 to 60 days, with the longer spans typically costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would with a shorter span of time
More Ways to Get a Great Interest Rate
In addition to opting for a shorter lock period, there are other ways you may be able to score the lowest rate. A larger down payment will give you a reduced interest rate, since you will have more equity from the beginning. You could opt to pay points to improve your rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for a long time.
Mason Mortgage Advisors can walk you through the pitfalls of getting a mortgage. Call us at (314) 395-8300.
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