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

Lock It In

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

Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer period typically costing more. The lending institution can agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a lower rate, besides choosing a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you're starting out with more equity. You can pay points to improve your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the life of the loan. You are paying more initially, but you will save money, especially if you don't refinance early.

F&T Mortgage, Inc. NMLS # 168839 (www.nmlsconsumeraccess.org) can answer questions about rate lock periods & many others. Call us: 214-300-8756.

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