Getting a Low Interest Rate

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Locking It In

A rate "lock" or "commitment" is a lender's promise to lock in a specific interest rate and a specific number of points for you for a specified period while your application is processed. This means your interest rate can't rise during the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lending institution will agree to freeze an interest rate and points for a longer period, such as 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 Save on Interest

There are other ways to get a good rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will get you a lower interest rate, because you are starting out with more equity. You could choose to pay points to bring down your rate over the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to improve the interest rate over the life of the loan. You'll pay more up front, but you will come out ahead, especially if you don't refinance early.

At Front Range Mortgage LLC, we answer questions about this process every day. Call us: (303) 524-9907.