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

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 specified period of time during your application process. This protects you from working through your whole application process and finding out at the end that the interest rate has gone up.

Although there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. The lending institution will agree to freeze an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are other ways to get a good rate, in addition to agreeing to a shorter rate lock period. The more the down payment, the lower the interest rate will be, since you will have more equity from the start. You may opt to pay points to reduce your rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more up front, but you will save money, especially if you keep the loan for the full term.

Reliance Mortgage Service, Inc can answer questions about rate lock periods & many others. Give us a call: 562 320-0510.

Get a New Loan Quote

Looking for a new home loan? Fill out the following form to get a fast quote from us.

Contact Info
Property Information
Mortgage Information
Questions