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

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a certain number of points for you for a certain period during your application process. This ensures that your interest rate won't go up during the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would have with a shorter rate lock period

Additional Ways to Save on Interest

There are more ways to get a better rate, in addition to choosing a shorter rate lock period. The larger down payment you pay, the lower your interest rate will be, as you will be starting with more equity. You can pay points to improve your interest rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the rate over the life of the loan. You'll pay more initially, but you'll come out ahead in the long run.

Arizona Wholesale Mortgage Inc. can answer questions about rate lock periods & many others. Call us at 623-340-0934.

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