"Rate Lock" and other Ways to Get a Lower Interest Rate
Freezing the Rate
When you are promised a "rate lock" from the lender, it means that you are guaranteed to keep a particular interest rate over a certain number of days for your application process. This saves you from getting through your entire application process and learning at the end that your interest rate has gotten higher.
While there are various lengths of rate lock periods (from 15 to 60 days), the longer spans are generally more expensive. A lender may agree to freeze an interest rate and points for a longer period, say 60 days, but in exchange, the rate (and sometimes points) will be higher than that of a rate lock of fewer days.
More Ways to Get a Great Interest Rate
There are more ways to get a reduced rate, besides agreeing to a shorter rate lock period. The bigger the down payment, the smaller your interest rate will be, as you will be starting with more equity. You can pay points to reduce 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 reduce the rate over the life of the loan. You pay more up front, but you will save money, especially if you don't refinance early.