Getting a Low Interest Rate
Locking It In
A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a particular number of points for you for a specified period while your application is processed. This protects you from getting through your entire application process and finding out at the end that the interest rate has gotten higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will most likely 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, besides agreeing to a shorter rate lock period. A larger down payment will result in a lower interest rate, since you'll have a good amount of equity at the start. You could choose to pay points to lower your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to bring the rate down over the life of the loan. You'll pay more initially, but you'll save money in the end.
Pioneer Mortgage Corp can walk you through the pitfalls of getting a mortgage. Call us: 781-245-4924.