Getting a Low Interest Rate

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Freezing the 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 certain period of time during your application process. This keeps you from going through your entire application process and finding out at the end that the interest rate has risen higher.

Rate lock periods can vary in length, anywhere from 15 to 60 days, with the longer spans generally costing more. A lender will agree to hold an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are other ways you are able to score the best rate. The more the down payment, the lower your interest rate will be, because you will have more equity from the beginning. You might opt to pay points to bring down your rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more up front, but you'll come out ahead in the long run.

Prosperity Co. dba Prosperity Mortgage Co. can answer questions about rate lock periods & many others. Call us: (630) 305-9207.