Getting a Low Interest Rate
Freezing the Rate
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 specified period of time while your application is processed. This ensures that your interest rate cannot grow as you are working through the application process.
Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter span of time
More Ways to Get a Great Interest Rate
There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you'll be starting out with a good deal of equity. You can pay points to lower your rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will come out ahead, especially if you keep the loan for the full term.
Valley Savers Mortgage, LLC can answer questions about rate lock periods and many others. Give us a call at (602) 332-9544.
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