Getting a Low Interest Rate

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Locking in your Interest Rate

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

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lending institution can agree to lock in an interest rate and points for a longer span of time, 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

In addition to going with a shorter rate lock period, there are several ways you can get the lowest rate. A larger down payment will result in a lower interest rate, since you will be starting out with a good deal of equity. You may opt to pay points to improve your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You pay more up front, but you will come out ahead, especially if you don't refinance early.

Laser Lending can walk you through the pitfalls of getting a mortgage. Call us at 801.999.0493.

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