When you are offered a "rate lock" from a lender, it means that you are guaranteed to keep a certain interest rate for a certain number of days for the application process. This means your interest rate can't get higher during the application process.
Rate lock periods can vary in length, between 15 to 60 days, with the longer period generally costing more. The lending institution will agree to freeze an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
There are other ways to get a reduced rate, besides choosing a shorter rate lock period. The larger down payment you can make, the lower your rate will be, because you will have more equity from the start. You can pay points to bring down your interest rate for the loan term, meaning you pay more up front. To a lot of people, this is a good option..
Looking for a new home loan? Fill out the following form to get a fast quote from us.