A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a specific number of points for you for a specified period of time during your application process. This ensures that your interest rate won't grow while you are working through the application process.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would have with a shorter rate lock span of time
In addition to choosing a shorter rate lock period, there are more ways you are able to score the best rate. A larger down payment will get you a lower interest rate, because you'll be starting out with more equity. You might choose to pay points to lower your rate for the term of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You'll pay more up front, but you'll save money in the long run.
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.