When you are offered a "rate lock" from your lender, it means that you are guaranteed to keep a set interest rate for a certain number of days for the application process. This ensures that your interest rate can't grow during the application process.
While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are generally more expensive. The lending institution may agree to hold an interest rate and points for a longer period, such as 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 going with a shorter rate lock period, there are other ways you can get the lowest rate. A larger down payment will get you a reduced interest rate, because you will have more equity at the start. You might opt to pay points to bring down your rate over the term of the loan, meaning you pay more up front. For many 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.