When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a specific interest rate over a certain number of days for your application process. This protects you from going through your whole application process and discovering at the end that the interest rate has risen higher.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer period typically costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher rate than you would with a shorter rate lock period
In addition to going with a shorter lock period, there are several ways you can get the lowest rate. The bigger the down payment, the lower your rate will be, because you will have more equity from the start. You could opt to pay points to reduce your rate for the loan term, meaning you pay more initially. One strategy that is a good option for many people is to pay points to improve the rate over the term of the loan. You will pay more up front, but you will save money, especially if you keep the loan for a long time.
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.