When you are promised a "rate lock" from the lender, it means that you are guaranteed to get a certain interest rate over a certain number of days while you work on your application process. This keeps you from working through your entire application process and finding out at the end that your interest rate has gone up.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are typically more expensive. The lending institution can agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
There are other ways to get a low rate, besides agreeing to a shorter rate lock period. A bigger down payment will result in a better interest rate, because you'll be starting out with a good deal of equity. You may opt to pay points to improve your interest rate for the loan term, meaning you pay more up front. To many 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.