A rate "lock" or "commitment" is a lender's promise to set a particular interest rate and a particular number of points for you for a certain period during your application process. This protects you from working through your entire application process and finding out at the end that the interest rate has gone up.
Although there are various lengths of rate lock periods (from 15 to 60 days), the longer ones are typically more expensive. A lending institution can agree to hold an interest rate and points for a longer period, such as sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
There are more ways to get a lower rate, besides going with a shorter rate lock period. The bigger the down payment, the lower the interest rate will be, since you will have more equity from the beginning. You might opt to pay points to reduce your rate for the loan term, meaning you pay more initially. To a lot of people, this is a good option..
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.