When you are offered a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a determined period for the application process. This saves you from working through your entire application process and discovering at the end that the interest rate has gotten higher.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended spans are generally more expensive. The lender may 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 more than with a rate lock of a shorter period.
In addition to going with a shorter lock period, there are more ways you may be able to get the best rate. A bigger down payment will give you a lower interest rate, since you'll have a good deal of equity from the beginning. You can pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that is a good option for some 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.