When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate for a certain number of days while you work on your application process. This ensures that your interest rate won't go up during the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lending institution may agree to freeze an interest rate and points for a longer period, say sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
There are more ways to get a lower rate, in addition to agreeing to a shorter rate lock period. The larger down payment you can pay, the lower the interest rate will be, because you will have more equity from the start. You may opt to pay points to lower your rate for the loan term, meaning you pay more initially. For a lot of people, this makes sense and is a good deal..
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.