"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking It In
A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a specific number of points for you for a certain period while your application is processed. This saves you from working through your whole application process and discovering at the end that the interest rate has risen higher.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer period generally costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter period
More Ways to Get a Great Interest Rate
There are other ways to get a low rate, besides choosing a shorter rate lock period. A larger down payment will result in a reduced interest rate, since you'll have more equity at the start. You could choose to pay points to bring down your interest rate for the life of the loan, meaning you pay more initially. To many people, this is a good option..
Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Call us at (808) 935-0678.
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