Getting a Low Interest Rate

What is a Rate Lock?

A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a specific number of points for you for a specified period of time during your application process. This means your interest rate can't grow during the application process.

Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer spans usually costing more. The lending institution can agree to lock in an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.

Other Interest Saving Strategies

In addition to choosing the shorter lock period, there are more ways you can get the lowest rate. The bigger down payment you can pay, the smaller the interest rate will be, since you will be entering the loan with more equity. You can pay points to improve your interest rate for the term of the loan, meaning you pay more up front. To many people, this makes financial sense..

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

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