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

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a specific number of points for you for a certain period during your application process. This ensures that your interest rate can't rise as you are working through the application process.

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

More Ways to Get a Great Interest Rate

In addition to choosing the shorter rate lock period, there are several ways you may be able to get the best rate. The larger down payment you make, the smaller your rate will be, because you will be starting with more equity. You can pay points to lower your rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the interest rate over the term of the loan. You pay more up front, but you'll come out ahead in the end.

AmeriBest Mortgage can answer questions about rate lock periods & many others. Give us a call at 3217777277.

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