Getting a Low Interest Rate
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Locking It In
A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This keeps you from working through your whole application process and discovering at the end that your interest rate has gotten higher.
While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher interest rate than you would with a shorter span of time
Other Ways to Save on Interest
There are other ways to get a low rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you're starting out with more equity. You might choose to pay points to improve your interest rate for the loan term, 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 will pay more initially, but you'll come out ahead, especially if you don't refinance early.
Primary Residential Mortgage, Inc. can walk you through the pitfalls of getting a mortgage. Call us at (214) 736-9466.