"Rate Lock" and other Ways to Get a Lower Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a specific number of points for you for a certain period of time during your application process. This means your interest rate can't get higher while you are working through the application process.
Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer period typically costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would have with a shorter rate lock span of time
Additional Ways to Save on Interest
There are other ways to get a lower rate, in addition to going with a shorter rate lock period. A larger down payment will get you a lower interest rate, because you're starting out with more equity. You may opt to pay points to bring down your interest rate over the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..
Washingtonian Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Call us at 410-451-2755.