"Rate Lock" and other Ways to Get a Lower Interest Rate
Locking in your Interest Rate
When you are promised a "rate lock" from your lender, it means that you are guaranteed to keep a particular interest rate over a determined period while you work on the application process. This keeps you from getting through your entire application process and finding out at the end that the interest rate has risen higher.
While there can be a choice of rate lock periods (from 15 to 60 days), the extended spans are usually more expensive. The lending institution can agree to hold an interest rate and points for a longer period, like 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
There are other ways to get a reduced rate, besides agreeing to a shorter rate lock period. The bigger the down payment, the smaller your rate will be, because you will be entering the loan with more equity. You could choose to pay points to reduce your rate over the loan term, 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 term of the loan. You pay more initially, but you'll come out ahead in the long run.