Getting a Low Interest Rate

Lock It In

A rate "lock" or "commitment" is a promise from the lender to set a particular interest rate and a particular number of points for you for a certain period of time while your application is processed. This prevents you from going through your entire application process and discovering at the end that the interest rate has gone up.

Rate lock periods can vary in length, between fifteen to sixty days, with the longer ones usually costing more. A 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 a shorter period.

Other Interest Saving Strategies

There are other ways to get a better rate, besides going with a shorter rate lock period. The larger the down payment, the better the rate will be, as you will have more equity from the beginning. You can pay points to bring down your rate over the loan term, meaning you pay more initially. To a lot of people, this makes sense and is a good deal..

At Riverside Funding Corp., we answer questions about this process every day. Call us at 516-431-2009.

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