Getting a Low Interest Rate

Locking It In

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a certain number of points for you for a specified period of time while your application is processed. This saves you from going through your whole application process and learning at the end that your interest rate has gone up.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lending institution may agree to freeze an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a low rate, in addition to going with a shorter rate lock period. The larger the down payment, the lower the interest rate will be, because you will have more equity from the start. You can pay points to reduce your interest rate for 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 initially, but you'll save money in the end.

Boardwalk Mortgage can answer questions about rate lock periods & many others. Call us at 1-800-606-2794.