"Rate Lock" and other Ways to Get a Lower Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a particular number of points for you for a certain period during your application process. This ensures that your interest rate cannot grow during the application process.

Although there might be a choice of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lender can agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to choosing a shorter lock period, there are several ways you can score the best rate. A bigger down payment will result in a reduced interest rate, because you're starting out with a good deal of equity. You can pay points to reduce your rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to improve the interest rate over the term of the loan. You'll pay more initially, but you will come out ahead in the long run.

First Southeast Mortgage Corporation can answer questions about rate lock periods and many others. Call us at 954.920.9799.

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