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

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Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a certain number of points for you for a certain period of time while your application is processed. This means your interest rate will not grow while you are working through the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. A lending institution can agree to freeze an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to opting for the shorter rate lock period, there are other ways you can get the best rate. A larger down payment will give you a reduced interest rate, since you will be starting out with more equity. You can pay points to improve your rate for the term of the loan, meaning you pay more up front. 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 will save money, especially if you keep the loan for the full term.

At Cason Home Loans, we answer questions about this process every day. Give us a call at 863-286-4824.

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