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

Freezing the Rate

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

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

More Ways to Get a Great Interest Rate

There are more ways to get a lower rate, in addition to going with a shorter rate lock period. The bigger down payment you can pay, the lower the rate will be, as you will have more equity from the beginning. You can pay points to bring down your interest rate for the loan term, meaning you pay more initially. To many people, this makes sense and is a good deal..

At Southwest Funding #841
Company NMLS # 303440, we answer questions about this process every day. Call us at 5122916100.

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Southwest Funding #841
Company NMLS # 303440

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1016 La Posada Dr Ste 155-D
Austin, TX 78752