"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 set a particular interest rate and a particular number of points for you for a specified period while your application is processed. This protects you from going through your whole application process and learning at the end that the interest rate has gotten higher.

While there are several lengths 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 doing so, will likely have a higher interest rate than you would have with a shorter rate lock span of time

More Ways to Save on Interest

In addition to choosing the shorter rate lock period, there are several ways you can get the best rate. The bigger the down payment, the lower your rate will be, because you will be entering the loan with more equity. You could choose to pay points to bring down your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you'll come out ahead in the long run.

At Atlantic Financial Services, we answer questions about this process every day. Give us a call: (732) 969-9300.

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