What is a "rate lock period"?
Freezing the Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to get a certain interest rate over a certain number of days for your application process. This means your interest rate cannot get higher while you are working through the application process.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer ones typically costing more. The lending institution will agree to lock in an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are more ways to get a lower rate, besides choosing a shorter rate lock period. The bigger the down payment, the lower the rate will be, because you will have more equity from the start. You could opt to pay points to improve your interest rate for the loan term, meaning you pay more initially. One strategy that makes financial sense for many people is to pay points to reduce the interest rate over the term of the loan. You'll pay more initially, but you will come out ahead, especially if you don't refinance early.