Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to lock in a particular interest rate and a particular number of points for you for a certain period of time while your application is processed. This protects you from working through your whole application process and learning at the end that your interest rate has risen higher.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans usually costing more. A lending institution may agree to hold an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

There are other ways to get a low rate, besides opting for a shorter rate lock period. A bigger down payment will give you a better interest rate, since you will have more equity from the beginning. You may choose to pay points to lower your rate for the loan term, meaning you pay more up front. For many people, this is a good option..

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can answer questions about rate lock periods and many others. Call us at (808) 935-0678.