What is a "rate lock period"?

Lock It In

When you're offered a "rate lock" from the lender, it means that you are guaranteed to get a particular interest rate over a certain number of days for your application process. This ensures that your interest rate won't grow during the application process.

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

Additional Ways to Save on Interest

There are more ways to get a better rate, in addition to going with a shorter rate lock period. The more the down payment, the better the rate will be, as you will be starting with more equity. You might choose to pay points to improve 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 life of the loan. You are paying more up front, but you will come out ahead in the long run.

At First Community Bank of Central Al., we answer questions about this process every day. Give us a call: (334) 285-8850.

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