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

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What is a Rate Lock?

A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a particular number of points for you for a certain period during your application process. This means your interest rate won't get higher during the application process.

Although there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter rate lock period

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are more ways you are able to attain the best rate. The more the down payment, the lower your interest rate will be, because you will have more equity from the beginning. You can pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option 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 will come out ahead in the long run.

At CU Mortgage Division, we answer questions about this process every day. Give us a call: 360-539-4687.