When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days while you work on your application process. This keeps you from going through your entire application process and learning at the end that your interest rate has gotten higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. A lender will agree to lock in an interest rate and points for a longer span of time, say 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of fewer days.
In addition to going with the shorter rate lock period, there are more ways you can get the lowest rate. The bigger down payment you make, the lower the interest rate will be, since you will have more equity from the beginning. You can pay points to improve your interest rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the interest rate over the life of the loan. You will pay more initially, but you'll come out ahead, especially if you keep the loan for a long time.
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.