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

Locking It In

A rate "lock" or "commitment" is a lender's promise to set a certain interest rate and a particular number of points for you for a specified period during your application process. This ensures that your interest rate can't rise during the application process.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer ones typically costing more. The lending institution can agree to lock in an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Ways to Save on Interest

There are other ways to get a good rate, besides opting for a shorter rate lock period. The larger down payment you can make, the smaller your rate will be, since you will have more equity from the start. You could choose to pay points to lower your interest rate over the life of the loan, meaning you pay more up front. For many people, this is a good option..

Stepping Stone Mortgage can walk you through the pitfalls of getting a mortgage. Call us: (541) 683-3300.

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