Begin by checking out current interest rates and rate movements when
shopping for a mortgage. Mortgage rates generally rise and fall
along with Wall Street securities and generally reflect the overall
direction of interest rates. By keeping an eye on mortgage market
trends and key economic indicators, a borrower has a better chance
of obtaining interest rate savings.
What is APR?
A tool used to compare loans across different lenders is the Annual
Percentage Rate (APR). The Federal Truth in Lending law requires
mortgage companies to disclose the APR when they advertise a rate.
It is designed to represent the true cost of the loan to the
borrower, expressed in the form of a yearly rate. The purpose is to
prevent lenders from hiding fees and upfront costs behind low
advertised interest rates.
Lock in Your Rate
A lock in, also called a rate lock or rate commitment, is a lender's
promise to hold a certain interest rate and a certain number of
points for you, usually for a specified period of time, while your
loan application is processed. Depending upon the lender, you may be
able to lock in the interest rate and number of points that you will
be charged when you file your application, during processing of the
loan, when the loan is approved, or later.