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 certain number of points for you for a certain period while your application is processed. This means your interest rate won't get higher during the application process.
Rate lock periods can be various lengths of time, 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 most likely have a higher rate than you would have with a shorter span of time
More Ways to Save on Interest
There are other ways to get a low rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the better your rate will be, as you will be starting with more equity. You could opt to pay points to lower your interest rate over the life of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll come out ahead, especially if you don't refinance early.
Contemporary Mortgage Services, Inc can walk you through the pitfalls of getting a mortgage. Give us a call at 407-834-3377.
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