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

Locking It In

A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a certain number of points for you for a certain period during your application process. This ensures that your interest rate will not grow as you are working through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lender will 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 with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a good rate, in addition to opting for a shorter rate lock period. A larger down payment will get you a better interest rate, because you'll have a good deal of equity at the start. You might choose to pay points to bring down your interest rate over the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to improve the interest rate over the life of the loan. You are paying more up front, but you will save money, especially if you keep the loan for a long time.

Stepping Stone Mortgage can answer questions about rate lock periods & many others. Give us a call: (541) 683-3300.

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