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 specific number of points for you for a certain period while your application is processed. This ensures that your interest rate cannot get higher during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher rate than you would have with a shorter span of time

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are several ways you are able to attain the best rate. The larger down payment you make, the lower the rate will be, since you will be starting with more equity. You can pay points to improve your interest rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You'll pay more up front, but you will come out ahead in the end.

The Reen Team at American Pacific Mortgage can answer questions about rate lock periods and many others. Call us at (408) 626-1879.

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