What is a "rate lock period"?
Locking It In
A rate "lock" or "commitment" is a promise from the lender to hold a particular interest rate and a specific number of points for you for a specified period of time during your application process. This prevents you from working through your entire application process and discovering at the end that the interest rate has gone up.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in choosing this option, will likely have a higher interest rate than you would have with a shorter rate lock span of time
More Ways to Save on Interest
There are other ways to get a good rate, besides going with a shorter rate lock period. A bigger down payment will get you a better interest rate, since you're starting out with more equity. You might opt to pay points to bring down your interest rate for the term of the loan, meaning you pay more up front. For a lot of people, this makes financial sense..
American First Bancorp, Inc. can walk you through the pitfalls of getting a mortgage. Call us: 330-492-7757.