When you are offered a "rate lock" from a lender, it means that you are guaranteed to get a particular interest rate for a certain number of days while you work on the application process. This keeps you from getting through your whole application process and learning at the end that your interest rate has risen higher.
Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would have with a shorter span of time
In addition to opting for the shorter lock period, there are other ways you are able to attain the lowest rate. A larger down payment will result in a better interest rate, since you'll be starting out with a good deal of equity. You can pay points to lower your rate for the term of the loan, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to reduce the interest rate over the life of the loan. You'll pay more initially, but you'll save money in the long run.
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.