Getting a Low Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a particular 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 going through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. The lender will agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Save on Interest

There are more ways to get a low rate, in addition to choosing a shorter rate lock period. A larger down payment will result in a lower interest rate, because you'll have more equity from the beginning. You can pay points to lower your interest rate for the loan term, meaning you pay more initially. For a lot of people, this makes financial sense..

Atlantic Financial Services can walk you through the pitfalls of getting a mortgage. Give us a call: (732) 969-9300.

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