Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a particular number of points for you for a certain period of time during your application process. This ensures that your interest rate can't go up as you are working through the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. A lender may agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to opting for the shorter rate lock period, there are other ways you may be able to get the best rate. The larger down payment you can pay, the lower your rate will be, as you will have more equity from the beginning. You might choose to pay points to lower your rate for the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You will pay more up front, but you'll save money in the end.

AmeriBest Mortgage can walk you through the pitfalls of getting a mortgage. Call us at 3217777277.