What is a "rate lock period"? How can you make sure your rate is low?

A rate lock or a rate commitment is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and at the end of it finding out the interest rate has gone up.   But remember, YOU AND THE LENDER share the responsibility for making sure the loan can close within the lock period.

Your loan must close before the lock expires.  This means that all loan conditions must be met, and your file cleared for closing before the closing documents can be drawn and the check issued.  If your lender still needs, for example, a bank statement verifying your cash to close, and you don't provide it until the day the lock expires, chances are likely your loan won't close on that date.  Underwriters, closers, and the title company still need time to complete their tasks on your file before the loan can close.  The quicker you respond and provide your documents to the lender, the more likely you will close within your lock.  

A rate lock period can vary in length, and longer ones usually cost more. A lender will agree to "hold" your interest rate and points for a longer periods, but in exchange the rate and maybe points are higher than with a shorter rate lock period.

There are many ways besides opting for a shorter rate lock period to get a lower rate, though. A larger down payment will result in a lower interest rate than a smaller one, because you're starting out with more equity. You can pay points to lower your rate over the life of the loan, but that means you pay more up front. For many people, this makes sense and is a good deal.

Finally, the interest rate a lender is willing to offer you depends on your credit score and your income-to-debt ratio. If you have good credit and your income far exceeds your debt obligations, you will qualify for a lower rate.