Getting a Low Interest Rate
Lock It In
A rate "lock" or "commitment" is a promise from the lender to lock in a certain interest rate and a certain number of points for you for a certain period of time during your application process. This prevents you from working through your entire application process and discovering at the end that your interest rate has risen higher.
While there may be a choice of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher interest rate than you would with a shorter rate lock period
Other Interest Saving Strategies
In addition to choosing a shorter lock period, there are more ways you may be able to get the lowest rate. The larger the down payment, the smaller your rate will be, since you will be entering the loan with more equity. You could choose to pay points to bring down your interest rate for the life of the loan, meaning you pay more up front. One strategy that is a good option for many people is to pay points to bring the rate down over the life of the loan. You are paying more up front, but you will save money in the end.
MGM Mortgage Inc. can walk you through the pitfalls of getting a mortgage. Give us a call: 800-555-6144.