Home Contact Us Customer Login

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

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a certain period during your application process. This keeps you from going through your whole application process and discovering at the end that the interest rate has gotten higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. A lending institution may agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

There are more ways to get a good rate, in addition to opting for a shorter rate lock period. A bigger down payment will result in a better interest rate, because you are starting out with more equity. You can pay points to improve your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the rate over the life of the loan. You'll pay more up front, but you'll come out ahead, especially if you don't refinance early.

Greystone Loans, Inc. can walk you through the pitfalls of getting a mortgage. Call us: (909) 467-1090.

Got a Question?

Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.

Your Information
Your Question