When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a specific interest rate over a certain number of days while you work on the application process. This prevents you from going through your whole application process and discovering at the end that your interest rate has risen higher.
Rate lock periods can vary in length, between 15 to 60 days, with the longer ones usually costing more. A lending institution can agree to hold an interest rate and points for a longer period, like sixty days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
In addition to going with the shorter rate lock period, there are more ways you are able to get the best rate. The more the down payment, the better the interest rate will be, because you will have more equity from the beginning. You can pay points to bring down your rate for the loan term, meaning you pay more up front. To 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.