Getting a Low Interest Rate

Lock It In

When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate for a determined period while you work on the application process. This ensures that your interest rate can't get higher during the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. The lending institution will agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Ways to Save on Interest

In addition to choosing a shorter lock period, there are more ways you can score the lowest rate. The bigger down payment you can make, the better your interest rate will be, because you will be starting with more equity. You might choose to pay points to bring down your rate for the term of the loan, 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 term of the loan. You'll pay more up front, but you'll save money, especially if you keep the loan for a long time.

American Commerce Mortgage can answer questions about rate lock periods and many others. Give us a call at 714-970-9700.

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