Getting a Low Interest Rate
Freezing the Rate
A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a particular number of points for you for a specified period of time while your application is processed. This keeps you from going through your entire application process and finding out at the end that the interest rate has risen higher.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. 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
There are more ways to get a good rate, in addition to opting for a shorter rate lock period. The more the down payment, the smaller your interest rate will be, as you will have more equity from the beginning. You can pay points to lower your interest rate for the term of the loan, meaning you pay more up front. To many people, this makes sense and is a good deal..
Harbor View Lending* a DBA of Megastar Financial can walk you through the pitfalls of getting a mortgage. Call us at (207) 571-8034.