Getting a Low Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a certain number of points for you for a specified period during your application process. This keeps you from working through your entire application process and learning at the end that your interest rate has gotten higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period generally costing more. You can get a longer period for your lock, but in doing so, will likely have a higher rate than you would with a shorter rate lock span of time
Other Ways to Save on Interest
In addition to choosing a shorter rate lock period, there are several ways you can get the lowest rate. A bigger down payment will result in a better interest rate, because you will be starting out with more equity. You can pay points to bring down your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to improve the rate over the life of the loan. You'll pay more initially, but you will come out ahead in the end.
Valley Savers Mortgage, LLC can walk you through the pitfalls of getting a mortgage. Give us a call at (602) 332-9544.
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