Getting a Low Interest Rate

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Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a certain number of points for you for a specified period during your application process. This means your interest rate will not go up while you are working through the application process.

While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. A lender can agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

There are more ways to get a better rate, in addition to choosing a shorter rate lock period. A bigger down payment will result in a better interest rate, since you'll be starting out with more equity. You can pay points to bring down your rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you'll save money in the end.

At FNB Town Square Mortgage, we answer questions about this process every day. Give us a call: (817) 235-3089.