Getting a Low Interest Rate
Locking It In
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a certain number of points for you for a certain period of time while your application is processed. This means your interest rate will not get higher during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones usually costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would have with a shorter rate lock span of time
Other Interest Saving Strategies
There are other ways to get a lower rate, in addition to agreeing to a shorter rate lock period. The bigger down payment you can make, the better your interest rate will be, since you will be starting with more equity. You might choose to pay points to improve your rate over the life of the loan, meaning you pay more up front. For a lot of people, this makes sense and is a good deal..
At Harbor View Lending* a DBA of Megastar Financial, we answer questions about this process every day. Call us: (207) 571-8034.