What is a "rate lock period"?
Locking in your Interest Rate
When you are offered a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate for a certain number of days while you work on the application process. This saves you from going through your entire application process and learning at the end that your interest rate has risen higher.
Rate lock periods can vary in length, anywhere from fifteen to sixty days, with the longer period usually costing more. The lender will agree to hold an interest rate and points for a longer period, such as 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of a shorter period.
Other Interest Saving Strategies
In addition to going with a shorter rate lock period, there are more ways you can get the best rate. A larger down payment will result in a reduced interest rate, since you are starting out with more equity. You might choose to pay points to bring down your rate over the loan term, meaning you pay more initially. One strategy that makes financial sense for some is to pay points to reduce the rate over the term of the loan. You are paying more initially, but you'll save money in the end.