What is a "rate lock period"?

Lock It In

A rate "lock" or "commitment" is a promise from the lender to hold a specific interest rate and a certain number of points for you for a specified period of time during your application process. This ensures that your interest rate can't go up during the application process.

While there are several lengths of rate lock periods (from 15 to 60 days), the extended ones 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 have with a shorter period

Other Interest Saving Strategies

There are other ways to get a good rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, because you are starting out with a good deal of equity. You may opt to pay points to reduce your rate over the life 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'll pay more initially, but you'll save money in the long run.

First State Bank can answer questions about rate lock periods and many others. Call us at 4025970500.