Getting a Low Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a specific number of points for you for a specified period of time during your application process. This means your interest rate won't get higher as you are going through the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans usually costing more. A lending institution will agree to freeze an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a low rate, besides going with a shorter rate lock period. The bigger down payment you make, the better your rate will be, since you will have more equity from the start. You might opt to pay points to reduce your rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You pay more up front, but you will come out ahead, especially if you don't refinance early.

At CHASE MORTGAGE, Inc. #317430, we answer questions about this process every day. Give us a call at 4357556622.