"Rate Lock" and other Ways to Get a Lower Interest Rate
Lock It In
When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a set interest rate over a certain number of days while you work on the application process. This means your interest rate won't grow as you are going through the application process.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period usually costing more. A lender will agree to freeze an interest rate and points for a longer period, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
Other Interest Saving Strategies
There are other ways to get a reduced rate, besides agreeing to a shorter rate lock period. A bigger down payment will give you a lower interest rate, because you will be starting out with a good deal of equity. You can pay points to bring down your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for many people is to pay points to improve the rate over the life of the loan. You'll pay more initially, but you'll save money in the long run.