Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a specific number of points for you for a certain period of time while your application is processed. This ensures that your interest rate can't go up while you are going through the application process.

Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lender will agree to hold an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

More Ways to Save on Interest

There are more ways to get a good rate, in addition to choosing a shorter rate lock period. The larger down payment you can pay, the better the rate will be, as you will have more equity from the start. You can pay points to improve your rate over 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 interest rate over the life of the loan. You'll pay more up front, but you'll save money in the long run.

At Firelight Mortgage Consultants, we answer questions about this process every day. Call us: (303) 228-2254.

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