A rate "lock" or "commitment" is a lender's promise to hold a specific interest rate and a certain number of points for you for a specified period during your application process. This means your interest rate will not get higher as you are working through the application process.
Rate lock periods can be various lengths of time, between 15 to 60 days, with the longer period typically costing more. A lending institution can agree to lock in an interest rate and points for a longer span of time, like sixty days, but in exchange, the rate (and sometimes points) will be more than that of a rate lock of fewer days.
There are more ways to get a low rate, in addition to agreeing to a shorter rate lock period. A bigger down payment will result in a lower interest rate, since you will be starting out with more equity. You can pay points to improve your rate over the loan term, meaning you pay more up front. For many people, this is a good option..
Looking for a new home loan? Fill out the following form to get a fast quote from us.