A rate "lock" or "commitment" is a promise from the lender to freeze a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This saves you from going through your whole application process and discovering at the end that the interest rate has gotten higher.
Although there may be a choice of rate lock periods (from 15 to 60 days), the extended ones are usually more expensive. The lender can agree to lock in an interest rate and points for a longer span of time, like 60 days, but in exchange, the rate (and sometimes points) will be more than with a rate lock of a shorter period.
There are other ways to get a reduced rate, besides choosing a shorter rate lock period. The bigger down payment you pay, the lower the rate will be, because you will be entering the loan with more equity. You may opt to pay points to bring down your rate for the loan term, meaning you pay more initially. For a lot of people, this is a good option..
Do you have a question? We can help. Simply fill out the form below and we'll contact you with the answer, with no obligation to you. We guarantee your privacy.