Getting a Low Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a certain number of points for you for a certain period of time during your application process. This saves you from working through your whole application process and finding out at the end that the interest rate has gotten higher.
Rate lock periods can be various lengths of time, between fifteen to sixty days, with the longer spans generally costing more. You can get a longer period for your lock, but in choosing this option, will probably have a higher interest rate than you would with a shorter period
Other Interest Saving Strategies
In addition to going with a shorter lock period, there are more ways you can attain the lowest rate. The larger down payment you make, the better the rate will be, as you will have more equity from the start. You may choose to pay points to reduce your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll save money, especially if you keep the loan for a long time.
Pioneer Mortgage Corp can walk you through the pitfalls of getting a mortgage. Call us at 781-245-4924.