A rate "lock" or "commitment" is a promise from the lender to freeze a particular interest rate and a certain number of points for you for a specified period of time during your application process. This means your interest rate cannot grow during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer spans typically costing more. You can get a longer period for your lock, but in making this choice, will likely have a higher interest rate than you would with a shorter rate lock period
In addition to going with the shorter lock period, there are other ways you are able to get the lowest rate. A larger down payment will get you a lower interest rate, since you will have a good deal of equity from the beginning. You could opt to pay points to improve your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to bring the rate down over the term of the loan. You'll pay more initially, but you will save money, especially if you don't refinance early.
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.