What does "rate lock" mean and do I want to lock in a rate?

What does "rate lock" mean and do I want to lock in a rate?

To look at the rate lock, let's take the example of purchase. Let's say you're going to close in the next thirty days, and we're starting a loan process. However, at this particular time, since you are now in escrow, we can lock your rate up until a couple of days before we have to close your loan. Look at it like a stock. The stocks move every day; so do my interest rates, and it's really a gamble. Do you want to want to play with the market on a daily basis, or do you want to get something locked in; knowing what you're going to get? I can quote you a rate today at six percent, but tomorrow it could go to six and a quarter, or it could go to 5.75. However, once you lock in, that bank is now expecting your loan to be closed at that particular rate that we locked initially. It's really a judgment call. It depends on where the market's at when you are actually are buying the house with me. At that particular time, I'll educate you on the market, how the ball market works, the mortgage-back security market and what kind of economic indicators are coming out that week. Then, we can make our determination, whether we lock or float.