When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate over a determined period for your application process. This means your interest rate cannot go up during the application process.
Although there are several lengths of rate lock periods (from 15 to 60 days), the longer spans are usually more expensive. The lender can agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
In addition to opting for the shorter rate lock period, there are more ways you are able to attain the best rate. The bigger down payment you pay, the smaller the interest rate will be, because you will have more equity from the beginning. You could opt to pay points to bring down your rate for the loan term, meaning you pay more up front. One strategy that is a good option for many people is to pay points to reduce the interest rate 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.