What is a "rate lock period"?

Locking It In

A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a particular number of points for you for a specified period of time during your application process. This means your interest rate can't rise during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lender may agree to lock in an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.

More Ways to Get a Great Interest Rate

In addition to choosing the shorter lock period, there are other ways you can get the lowest rate. A bigger down payment will give you a lower interest rate, because you'll have a good deal of equity from the beginning. You can pay points to bring down your rate over the life of the loan, 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 and many others. Give us a call: (334) 285-8850.

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