Getting a Low Interest Rate
Locking It In
When you are promised a "rate lock" from a lender, it means that you are guaranteed to keep a set interest rate over a certain number of days for the application process. This ensures that your interest rate won't get higher during the application process.
Rate lock periods can vary in length, between fifteen to sixty days, with the longer spans usually costing more. You can get a longer period for your lock, but in making this choice, will most likely have a higher interest rate than you would have with a shorter rate lock period
More Ways to Save on Interest
There are other ways to get a good rate, in addition to opting for a shorter rate lock period. The more the down payment, the smaller the rate will be, as you will be entering the loan with more equity. You could opt to pay points to reduce your rate for the loan term, meaning you pay more up front. One strategy that makes financial sense for some is to pay points to improve the interest rate over the term of the loan. You pay more initially, but you'll come out ahead, especially if you keep the loan for the full term.