Getting a Low Interest Rate

Lock It In

A rate "lock" or "commitment" is a lender's promise to lock in a particular interest rate and a specific number of points for you for a specified period while your application is processed. This keeps you from getting through your entire application process and learning at the end that the interest rate has risen higher.

Although there might be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. A lending institution will agree to lock in an interest rate and points for a longer span of time, say sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.

Other Interest Saving Strategies

There are more ways to get a lower rate, besides choosing a shorter rate lock period. The bigger down payment you can make, the lower the rate will be, because you will have more equity from the beginning. You could choose to pay points to improve your rate for the life of the loan, meaning you pay more initially. To a lot of people, this makes financial sense.