"Rate Lock" and other Ways to Get a Lower Interest Rate

Lock It In

A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a particular number of points for you for a specified period while your application is processed. This keeps you from working through your entire application process and discovering at the end that the interest rate has gotten higher.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer ones usually costing more. A lender 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 fewer days.

Other Interest Saving Strategies

There are other ways to get a reduced rate, in addition to going with a shorter rate lock period. A bigger down payment will result in a lower interest rate, since you're starting out with a good deal of equity. You can pay points to lower your interest rate over the loan term, meaning you pay more initially. To a lot of people, this makes financial sense..

Family Mortgage Company of Hawaii, Inc. NMLS #244497 can walk you through the pitfalls of getting a mortgage. Call us at (808) 935-0678.