"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and learning at the end that the interest rate has gotten higher.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans usually costing more. A lender can agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
More Ways to Save on Interest
In addition to going with the shorter rate lock period, there are more ways you can attain the lowest rate. The bigger the down payment, the better the interest rate will be, since you will be starting with more equity. You can pay points to improve your rate for the loan term, meaning you pay more up front. To a lot of people, this makes financial sense..
Coastal Mortgage Corp. can answer questions about rate lock periods and many others. Call us: 504-866-5626.
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