Getting a Low Interest Rate

Lock It In

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

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. A lending institution will agree to freeze an interest rate and points for a longer period, like sixty 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 good rate, in addition to opting for a shorter rate lock period. A larger down payment will result in a lower interest rate, because you'll have a good deal of equity at the start. You can pay points to improve your interest rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You are paying more initially, but you will save money, especially if you don't refinance early.

At Quick Quote Mortgage NMLS #388278, we answer questions about this process every day. Call us at 866-584-4650.

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