"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 particular interest rate and a certain number of points for you for a certain period of time while your application is processed. This means your interest rate can't rise during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter period
Additional Ways to Save on Interest
There are more ways to get a good rate, besides opting for a shorter rate lock period. A larger down payment will result in a lower interest rate, since you will be starting out with more equity. You can pay points to improve your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for many people 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 in the end.
At Washingtonian Mortgage, LLC, we answer questions about this process every day. Call us: 410-451-2755.