"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a lender's promise to hold a particular interest rate and a certain number of points for you for a certain period during your application process. This means your interest rate can't grow during the application process.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in doing so, will likely have a higher interest rate than you would have with a shorter rate lock period
Additional Ways to Save on Interest
In addition to opting for a shorter lock period, there are other ways you can score the lowest rate. A bigger down payment will result in a reduced interest rate, since you'll have more equity at the start. You might opt to pay points to reduce your rate for the term of the loan, meaning you pay more up front. For a lot of people, this is a good option..
Longhorn Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call at 512-302-9410.
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