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All the “experts” tell you to “shop for rates” — but they don’t tell you how to shop for rates. Without an understanding of how loans are priced and lock-in periods, calling up a lender to find out their interest rate could provide you with mostly useless information.

If you simply call up and ask for interest rates, a lender can tell you anything. One lender may quote a “floating” rate (seven or twelve day lock) and another may quote you a forty-five day lock. Another lender may quote you the rate for two points and another may quote you the rate for one point. If you call lenders on different days, you could get widely different quotes because rates don’t stay the same every day.


When you call a lender to shop for rates, you have to know at least two things: how many points you want to pay and how long you want to lock in the rate. You don’t have to really intend to lock in the rate, but you have to give them all the same parameters so that you get meaningful quotes. You also have to get your quotes all on the same day.

By the way, you can’t trust ads in the newspaper, on the radio or on television. Ads are generally placed at least a day or even a week in advance. Since rates change every day, ad quotes aren’t reliable.