Getting a Low Interest Rate
What is a Rate Lock?
A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a certain number of points for you for a certain period of time during your application process. This keeps you from getting through your entire application process and learning at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones generally costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would with a shorter span of time
More Ways to Get a Great Interest Rate
In addition to going with a shorter lock period, there are more ways you are able to score the lowest rate. The larger down payment you can pay, the better your rate will be, since you will be entering the loan with more equity. You might choose to pay points to lower your rate for the term of the loan, 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 up front, but you will save money, especially if you don't refinance early.
At Financial Edge Mortgage Corp., we answer questions about this process every day. Call us: 425-508-9988.
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