When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a particular interest rate over a certain number of days for your application process. This ensures that your interest rate won't rise during the application process.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones typically costing more. You can get a longer period for your lock, but in doing so, will probably have a higher rate than you would have with a shorter rate lock period
There are other ways to get a good rate, besides agreeing to a shorter rate lock period. The bigger down payment you pay, the smaller your interest rate will be, as you will be starting with more equity. You can pay points to improve your rate over the life of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to improve the interest rate over the term of the loan. You'll pay more initially, but you will come out ahead in the long run.
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.