When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days while you work on your application process. This keeps you from working through your whole application process and finding out at the end that the interest rate has gotten higher.
While there are several lengths of rate lock periods (from 15 to 60 days), the longer ones are usually more expensive. A lender can agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
In addition to going with a shorter rate lock period, there are more ways you can get the lowest rate. The bigger down payment you pay, the lower the rate will be, since you will have more equity from the beginning. You could opt to pay points to lower your 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 pay more initially, but you'll save money, especially if you keep the loan for a long time.
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.