Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a specific number of points for you for a certain period while your application is processed. This keeps you from going through your entire application process and finding out at the end that the interest rate has gone up.

While there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. You can get a longer period for your lock, but in doing so, will probably have a higher interest rate than you would with a shorter period

More Ways to Get a Great Interest Rate

In addition to choosing the shorter lock period, there are other ways you can attain the best rate. The larger down payment you can pay, the lower your rate will be, because you will be entering the loan with more equity. You could choose to pay points to reduce your interest rate over the loan term, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You will pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.

Bright Vision Mortgage can walk you through the pitfalls of getting a mortgage. Give us a call: 9043423622.

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