"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a certain number of points for you for a certain period during your application process. This protects you from going through your entire application process and discovering at the end that the interest rate has gone up.
Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans typically costing more. The lending institution can agree to lock in an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a low rate, in addition to agreeing to a shorter rate lock period. The more the down payment, the lower your interest rate will be, as you will have more equity from the start. You can pay points to bring down your rate for the life of the loan, meaning you pay more initially. To many people, this makes financial sense..
C2 Financial Corporation can answer questions about rate lock periods and many others. Call us: (727) 478-2797.
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