"Rate Lock" and other Ways to Get a Lower Interest Rate
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Locking It In
A rate "lock" or "commitment" is a promise from the lender to set a certain interest rate and a specific number of points for you for a certain period of time during your application process. This protects you from working through your whole application process and discovering at the end that your interest rate has risen higher.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer period typically costing more. The lender will agree to hold an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
In addition to going with a shorter lock period, there are other ways you are able to attain the lowest rate. The more the down payment, the lower your rate will be, because you will have more equity from the beginning. You may opt to pay points to improve your interest rate for the term of the loan, meaning you pay more up front. For many people, this makes sense and is a good deal..
AAA Mortgage Solutions, LLC can walk you through the pitfalls of getting a mortgage. Give us a call: 678-494-8250.