Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to hold a specific interest rate and a certain number of points for you for a specified period of time while your application is processed. This saves you from working through your whole application process and finding out at the end that your interest rate has risen higher.

While there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would have with a shorter period

Other Ways to Save on Interest

In addition to going with the shorter rate lock period, there are other ways you may be able to score the best rate. A bigger down payment will result in a lower interest rate, because you'll be starting out with a good deal of equity. You may opt to pay points to lower your rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the rate over the term of the loan. You'll pay more up front, but you will save money, especially if you don't refinance early.

Channel Mortgage LLC can walk you through the pitfalls of getting a mortgage. Give us a call at (718) 639-9500.

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