When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate for a determined period while you work on your application process. This protects you from getting through your entire 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 typically costing more. You can get a longer period for your lock, but in choosing this option, will most likely have a higher rate than you would with a shorter rate lock period
In addition to going with the shorter rate lock period, there are other ways you can attain the best rate. A bigger down payment will give you a lower interest rate, since you're starting out with a good deal of equity. You could choose to pay points to reduce your interest rate for the life of the loan, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to reduce the rate over the life of the loan. You'll pay more up front, but you will come out ahead, 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.