Many borrowers do not want to be surprised at the
close of the transaction with a rate which is higher than what was
quoted at the beginning of the process. Hence, many borrowers ask that
the lender commit or "lock" the initial rate quoted for a
period of time sufficient to close the transaction.
When a rate is "locked" the lender is
being asked to guarantee the price of a commodity, the price of which
changes daily. (Check out the daily changes in the bond market, which is
a measure of the price of money on a daily basis.) The longer the lock
period, the riskier the position of the lender, hence the higher the
loan price (points) charged the borrower.