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

Freezing the Rate

When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a set interest rate over a determined period while you work on your application process. This means your interest rate can't grow during the application process.

While there can be a choice of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. The lender will agree to hold an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.

Additional Ways to Save on Interest

There are other ways to get a low rate, besides agreeing to a shorter rate lock period. A larger down payment will give you a lower interest rate, since you're starting out with a good deal of equity. You might choose to pay points to improve your rate over the loan term, meaning you pay more up front. To many people, this is a good option..

First Community Bank of Central Al. can answer questions about rate lock periods & many others. Give us a call at (334) 285-8850.

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