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 while your application is processed. This saves you from going through your whole application process and discovering at the end that the interest rate has gotten higher.
Although there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would with a shorter period
There are more ways to get a lower rate, in addition to opting for a shorter rate lock period. The more the down payment, the lower your interest rate will be, as you will have more equity from the start. You may choose to pay points to bring down your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to reduce the interest rate over the life of the loan. You pay more initially, but you will save money in the end.
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.