Getting a Low Interest Rate

Freezing the Rate

A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a specific number of points for you for a specified period of time during your application process. This keeps you from getting through your whole application process and finding out at the end that your interest rate has gotten higher.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would with a shorter rate lock period

More Ways to Save on Interest

There are more ways to get a reduced rate, in addition to agreeing to a shorter rate lock period. The bigger down payment you make, the lower the interest rate will be, since you will be entering the loan with more equity. You can pay points to bring down your interest rate over the life of the loan, meaning you pay more initially. One strategy that is a good option for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you keep the loan for a long time.

At Pioneer Mortgage Corp, we answer questions about this process every day. Give us a call at 781-245-4924.