Getting a Low Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a specific number of points for you for a certain period while your application is processed. This ensures that your interest rate will not go up during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lender can agree to lock in an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to going with the shorter rate lock period, there are more ways you may be able to get the lowest rate. The more the down payment, the smaller your interest rate will be, as you will be entering the loan with more equity. You can pay points to lower your rate for the term of the loan, meaning you pay more up front. For many people, this is a good option..