A rate "lock" or "commitment" is a lender's promise to set a specific interest rate and a particular number of points for you for a certain period while your application is processed. This ensures that your interest rate cannot rise during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans usually costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would have with a shorter rate lock period
In addition to opting for the shorter lock period, there are several ways you can score the best rate. The larger the down payment, the smaller the interest rate will be, as you will have more equity from the beginning. You can pay points to bring down your interest rate over the life of the loan, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to bring the rate down over the life of the loan. You are paying more initially, but you'll save money in the end.
Reliant Mortgage Ltd. - NMLS ID# 316483 is regulated by Texas Department of Savings & Mortgage Lending. Information on consumer complaints can be obtained at http://www.sml.texas.gov/ConsumerInformation/tdsml_consumer_complaints.html
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