"Rate Lock" and other Ways to Get a Lower Interest Rate

What is a Rate Lock?

When you're offered a "rate lock" from the lender, it means that you are guaranteed to keep a certain interest rate for a certain number of days for your application process. This prevents you from going through your whole application process and discovering at the end that your interest rate has gotten higher.

Rate lock periods can be various lengths of time, anywhere from fifteen to sixty days, with the longer ones usually costing more. You can get a longer period for your lock, but in doing so, will most likely have a higher rate than you would with a shorter span of time

Other Interest Saving Strategies

In addition to opting for a shorter rate lock period, there are several ways you can get the best rate. The larger the down payment, the smaller your rate will be, since you will have more equity from the start. You can pay points to improve your rate over the term of the loan, meaning you pay more initially. One strategy that is a good option for some is to pay points to bring the rate down over the term of the loan. You are paying more up front, but you will save money, especially if you don't refinance early.