Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to hold a certain interest rate and a certain number of points for you for a certain period while your application is processed. This means your interest rate can't grow as you are going through the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. The lending institution may agree to freeze an interest rate and points for a longer period, say sixty 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 opting for a shorter rate lock period, there are more ways you can attain the lowest rate. The bigger down payment you make, the better the rate will be, as you will have more equity from the start. You can pay points to improve your interest rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you will save money in the long run.

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



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