A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a particular number of points for you for a specified period during your application process. This saves you from working through your entire application process and learning at the end that the interest rate has gone up.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter span of time
In addition to choosing the shorter rate lock period, there are several ways you are able to score the best rate. A bigger down payment will get you a lower interest rate, because you will be starting out with a good deal of equity. You may choose to pay points to lower your rate for the loan term, meaning you pay more initially. To many people, this is a good option..
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.