Getting a Low Interest Rate
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Lock It In
A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a specific number of points for you for a specified period of time during your application process. This saves you from going through your whole application process and finding out at the end that the interest rate has gone up.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans usually costing more. The lender may agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are other ways to get a reduced rate, in addition to opting for a shorter rate lock period. A larger down payment will get you a lower interest rate, since you're starting out with a good deal of equity. You can pay points to lower your rate over the loan term, meaning you pay more up front. To a lot of people, this makes sense and is a good deal.
At Front Range Lending, we answer questions about this process every day. Give us a call at 720-253-7070.