Getting a Low Interest Rate
What is a Rate Lock?
When you are promised a "rate lock" from a lender, it means that you are guaranteed to get a set interest rate over a determined period for the application process. This keeps you from working through your whole application process and finding out at the end that the interest rate has gotten higher.
Although there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution may agree to lock in an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of a shorter period.
More Ways to Get a Great Interest Rate
In addition to going with the shorter lock period, there are several ways you may be able to attain the best rate. A bigger down payment will give you a reduced interest rate, since you will have more equity from the beginning. You may opt to pay points to reduce your interest rate for the term of the loan, meaning you pay more up front. For many people, this is a good option..