Getting a Low Interest Rate

Lock It In

A rate "lock" or "commitment" is a lender's promise to lock in a certain interest rate and a certain number of points for you for a certain period during your application process. This means your interest rate won't rise while you are going through the application process.

Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. The lending institution can 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 more than with a rate lock of fewer days.

More Ways to Get a Great Interest Rate

There are more ways to get a reduced rate, in addition to choosing a shorter rate lock period. A bigger down payment will get you a lower interest rate, since you are starting out with more equity. You may opt to pay points to bring down your rate over the loan term, meaning you pay more initially. One strategy that is a good option for some is to pay points to reduce the rate over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you don't refinance early.

Cal Coast Financial Corp can walk you through the pitfalls of getting a mortgage. Call us at (510) 683-9850.

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