"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a certain number of points for you for a certain period of time while your application is processed. This prevents you from getting through your entire application process and discovering at the end that the interest rate has risen higher.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution may agree to freeze an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a lower rate, besides choosing a shorter rate lock period. A bigger down payment will give you a lower interest rate, since you'll have more equity at the start. You can pay points to reduce your interest rate for the loan term, meaning you pay more initially. To many people, this is a good option..

The Mortgage Exchange Service LLC can answer questions about rate lock periods & many others. Give us a call at 703.255-5810.

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