Getting a Low Interest Rate

Locking It In

A rate "lock" or "commitment" is a promise from the lender to freeze a specific interest rate and a certain number of points for you for a specified period of time while your application is processed. This ensures that your interest rate won't go up while you are going through the application process.

Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer spans typically costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher rate than you would have with a shorter period

More Ways to Save on Interest

There are more ways to get a good rate, besides agreeing to a shorter rate lock period. A bigger down payment will give you a better interest rate, since you are starting out with more equity. You might choose to pay points to improve your interest rate for the life of the loan, 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 initially, but you'll save money, especially if you keep the loan for a long time.

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



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