"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you're promised a "rate lock" from your lender, it means that you are guaranteed to get a set interest rate over a determined period while you work on the application process. This means your interest rate won't get higher while you are going through the application process.
Although there are various lengths of rate lock periods (from 15 to 60 days), the extended spans are typically more expensive. The lending institution may agree to hold an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be higher than with a rate lock of fewer days.
Other Ways to Save on Interest
In addition to opting for the shorter rate lock period, there are more ways you can get the best rate. A bigger down payment will get you a reduced interest rate, because you are starting out with a good deal of equity. You can pay points to bring down your rate over the term of the loan, meaning you pay more up front. One strategy that is a good option for some is to pay points to bring the rate down over the life of the loan. You are paying more initially, but you will save money, especially if you don't refinance early.