When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a specific interest rate for a determined period while you work on the application process. This means your interest rate won't rise during the application process.
While there are various lengths of rate lock periods (from 15 to 60 days), the extended ones are typically more expensive. A lender will agree to hold an interest rate and points for a longer span of time, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
There are other ways to get a low rate, in addition to opting for a shorter rate lock period. A larger down payment will give you a reduced interest rate, since you're starting out with more equity. You can pay points to reduce your rate for the life of the loan, meaning you pay more up front. For many people, this makes financial sense..
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.