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

Lock It In

A rate "lock" or "commitment" is a promise from the lender to set a specific 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 whole application process and finding out at the end that the interest rate has gone up.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans typically costing more. A lending institution can agree to freeze an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a low rate, besides agreeing to a shorter rate lock period. A bigger down payment will result in a reduced interest rate, since you will have a good deal of equity from the beginning. You can pay points to lower your rate over the loan term, meaning you pay more up front. For many people, this makes financial sense..

Atlantic Financial Services can answer questions about rate lock periods and many others. Call us at (732) 969-9300.

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