Getting a Low Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a certain number of points for you for a specified period of time during your application process. This prevents you from getting through your entire application process and learning at the end that your interest rate has risen higher.

Although there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would with a shorter span of time

Other Interest Saving Strategies

In addition to opting for the shorter rate lock period, there are more ways you can attain the best rate. The larger down payment you can pay, the smaller the interest rate will be, as you will be starting with more equity. You might opt to pay points to reduce your interest rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to reduce the interest rate over the life of the loan. You'll pay more up front, but you will save money in the end.

At American Commerce Mortgage, we answer questions about this process every day. Give us a call at 714-970-9700.

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