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

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to freeze a particular interest rate and a particular number of points for you for a specified period during your application process. This means your interest rate won't grow during the application process.

While there might be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. A lending institution may agree to lock in an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Additional Ways to Save on Interest

In addition to choosing a shorter lock period, there are more ways you can score the best rate. A larger down payment will get you a lower interest rate, because you will have a good amount of equity from the beginning. You may choose to pay points to improve your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to improve the interest rate over the term of the loan. You are paying more up front, but you will come out ahead, especially if you keep the loan for the full term.

Pacificwide Lending can answer questions about rate lock periods and many others. Give us a call: 9254610500.

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Pacificwide Lending

CA License #01762647 NMLS#241222, TX License #241222, FL License # MBR 3291

7041 Koll Center Pkwy Ste 270 Ste 270
Pleasanton, CA 94566