Getting a Low Interest Rate

Locking in your Interest Rate

A rate "lock" or "commitment" is a lender's promise to hold a particular interest rate and a certain number of points for you for a certain period of time during your application process. This means your interest rate will not go up while you are working through the application process.

Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would with a shorter rate lock period

More Ways to Get a Great Interest Rate

There are more ways to get a good rate, besides going with a shorter rate lock period. A bigger down payment will result in a lower interest rate, because you'll be starting out with more equity. You can pay points to bring down your interest rate for the term of the loan, 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 term of the loan. You will pay more initially, but you'll save money in the end.

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

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