Getting a Low Interest Rate

Locking It In

A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a certain number of points for you for a certain period of time while your application is processed. This prevents you from going through your whole application process and finding out at the end that your interest rate has risen higher.

Although there may be a choice of rate lock periods (from 15 to 60 days), the extended ones are generally more expensive. You can get a longer period for your lock, but in choosing this option, will most likely have a higher interest rate than you would have with a shorter rate lock period

Other Interest Saving Strategies

In addition to opting for a shorter lock period, there are other ways you are able to score the lowest rate. The larger down payment you pay, the lower your interest rate will be, since you will be entering the loan with more equity. You can pay points to reduce your interest rate for the loan term, meaning you pay more up front. For many people, this is a good option..

Alerus Mortgage can answer questions about rate lock periods and many others. Call us at 952 417 8481.

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