"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
A rate "lock" or "commitment" is a promise from the lender to lock in a specific interest rate and a certain number of points for you for a specified period of time during your application process. This keeps you from going through your whole application process and finding out at the end that your interest rate has gotten higher.
Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender can agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
There are other ways to get a good rate, besides agreeing to a shorter rate lock period. A bigger down payment will result in a lower interest rate, since you'll be starting out with a good deal of equity. You could opt to pay points to reduce your interest rate over the life of the loan, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Give us a call: (207) 571-8034.