"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 freeze a certain interest rate and a particular number of points for you for a certain period while your application is processed. This protects you from going through your whole application process and discovering at the end that the interest rate has gone up.

Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones usually costing more. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter period

Other Interest Saving Strategies

There are other ways to get a better rate, in addition to agreeing to a shorter rate lock period. The bigger the down payment, the smaller the rate will be, since you will have more equity from the start. You may opt to pay points to lower your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more up front, but you'll come out ahead, especially if you don't refinance early.

At AmeriBest Mortgage, we answer questions about this process every day. Call us: 3217777277.