Getting a Low Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a promise from the lender to set a specific interest rate and a particular number of points for you for a certain period of time while your application is processed. This protects you from getting through your whole application process and learning at the end that your interest rate has risen higher.
Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher rate than you would with a shorter span of time
Other Ways to Save on Interest
In addition to going with a shorter rate lock period, there are several ways you may be able to attain the lowest rate. The bigger the down payment, the better the interest rate will be, since you will have more equity from the beginning. You can pay points to reduce your rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you will come out ahead in the long run.
Financial Edge Mortgage Corp. can answer questions about rate lock periods & many others. Call us: 425-508-9988.
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