When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a certain number of days while you work on the application process. This saves you from getting through your whole application process and discovering at the end that your interest rate has gone up.
Although there can be a choice of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. The lending institution may agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
In addition to opting for the shorter rate lock period, there are other ways you can get the best rate. A larger down payment will result in a better interest rate, since you are starting out with more equity. You might choose to pay points to bring down your interest rate for the life of the loan, meaning you pay more initially. For a lot of people, this is a good option..
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.