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

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a particular number of points for you for a certain period of time during your application process. This prevents you from getting through your whole application process and learning at the end that your interest rate has gotten higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period generally costing more. The lending institution may agree to hold 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 with a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a low rate, in addition to going with a shorter rate lock period. The bigger the down payment, the better the rate will be, since you will have more equity from the start. You can pay points to bring down your rate for the loan term, meaning you pay more up front. For many people, this is a good option..

Harbor View Lending* a DBA of Megastar Financial can answer questions about rate lock periods and many others. Call us at (207) 571-8034.