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

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to lock in 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 go up during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer period generally costing more. The lending institution can 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 fewer days.

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are other ways you may be able to get the lowest rate. The larger down payment you pay, the smaller your interest rate will be, since you will be entering the loan with more equity. You could choose to pay points to lower your rate for the life of the loan, meaning you pay more initially. For a lot of people, this is a good option..

At BancZone, we answer questions about this process every day. Call us: 407-583-6250.

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