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

Locking It In

A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a specific number of points for you for a certain period of time during your application process. This means your interest rate will not get higher during the application process.

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter rate lock period

Other Interest Saving Strategies

In addition to opting for the shorter lock period, there are other ways you can get the best rate. A bigger down payment will give you a better interest rate, because you are starting out with more equity. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You pay more up front, but you will come out ahead in the end.

At The Lending Source, we answer questions about this process every day. Call us at (973) 601-2122.

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