Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a certain number of points for you for a specified period while your application is processed. This protects you from getting through your whole application process and finding out at the end that the interest rate has gone up.

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

Other Interest Saving Strategies

There are other ways to get a reduced rate, besides going with a shorter rate lock period. The bigger down payment you pay, the lower the rate will be, since you will be starting with more equity. You can pay points to improve your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the term of the loan. You will pay more up front, but you'll save money in the end.

At Arizona Wholesale Mortgage Inc., we answer questions about this process every day. Call us at 623-340-0934.

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