"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a particular number of points for you for a specified period while your application is processed. This saves you from going through your whole application process and finding out at the end that your interest rate has gotten higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter span of time
Other Interest Saving Strategies
In addition to opting for a shorter rate lock period, there are other ways you can score the lowest rate. A larger down payment will get you a reduced interest rate, since you'll have more equity at the start. You can pay points to lower your interest rate for the life of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..
Real Property Finance can walk you through the pitfalls of getting a mortgage. Give us a call: 310-379-5997.
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