"Rate Lock" and other Ways to Get a Lower Interest Rate

Lock It In

A rate "lock" or "commitment" is a lender's promise to freeze a specific interest rate and a certain number of points for you for a specified period of time during your application process. This ensures that your interest rate will not go up during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. You can get a longer period for your lock, but in making this choice, will probably have a higher rate than you would with a shorter rate lock span of time

Other Ways to Save on Interest

There are more ways to get a low rate, in addition to going with a shorter rate lock period. A bigger down payment will give you a better interest rate, because you'll have more equity at the start. You can pay points to improve your rate for the life of the loan, meaning you pay more initially. One strategy that makes financial sense 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 in the end.

At Northeast Bancorp of America, Inc., we answer questions about this process every day. Give us a call at (440) 234-9660.

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