Getting a Low Interest Rate

Locking It In

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a particular number of points for you for a certain period of time while your application is processed. This saves you from getting through your whole application process and discovering at the end that your interest rate has gone up.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. A lender may agree to lock in 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 higher than that of a rate lock of fewer days.

Additional Ways to Save on Interest

There are other ways to get a reduced rate, besides going with a shorter rate lock period. A larger down payment will result in a better interest rate, since you will have a good deal of equity from the beginning. You can pay points to bring down your rate over the life of the loan, meaning you pay more initially. To a lot of people, this is a good option..

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

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