"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 lock in a certain interest rate and a specific number of points for you for a specified period during your application process. This ensures that your interest rate will not rise as you are working through the application process.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones usually costing more. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would with a shorter rate lock period

Other Ways to Save on Interest

There are more ways to get a better rate, in addition to agreeing to a shorter rate lock period. The bigger the down payment, the better your interest rate will be, since you will have more equity from the beginning. You may opt to pay points to lower your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You are paying more initially, but you'll come out ahead in the end.

At Chris Caggiano - Grand Oaks Funding, LLC, we answer questions about this process every day. Give us a call: (718) 477-4405.

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