"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
A rate "lock" or "commitment" is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This keeps you from going through your entire application process and finding out at the end that your interest rate has gone up.
Rate lock periods can be various lengths of time, anywhere from 15 to 60 days, with the longer ones typically costing more. The lending institution will agree to hold an interest rate and points for a longer span of time, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of a shorter period.
Other Interest Saving Strategies
There are more ways to get a reduced rate, in addition to agreeing to a shorter rate lock period. A larger down payment will get you a lower interest rate, because you'll have a good amount of equity from the beginning. You may choose to pay points to lower your interest rate over the term of the loan, meaning you pay more up front. For a lot of people, this is a good option..