I agree with the answers below. Don't lock in your rate until you have an approved demand statement from the first lien holder approving the short sale. If there is a second lien holder, be sure that an AGREED TO payoff for that loan is factored into that demand statement (meaning that you also have to have an approved payoff amount from the second lender).
I wanted to add that if you are getting a Fannie Mae backed loan (check with your lender) you will probably not be able to lock in a rate until your appraisal is complete. I'm not a lender. But in representing buyers exclusively, I know that new underwriting guidelines in lending are affecting the chronological order of these things. Be sure to get all your questions answered by your lender up front before you open escrow. And make sure you have an knowledgeable one that can. Let me know if you need a referral.
Best of luck!
San Diego Real Estate Specialist
Residential Sales and Appraisal
Do not lock in the rate. It sounds like you still do not have an approval from the bank on the short sale. The lock is good for only a short period of time, not long enough to get the approval from the bank selling you the short sale.
Besides, it may cost you money to lock it in and you are not ready yet to close.
To the best of your ability, keep things in perspective. Often when I speak with borrowers who are concerned about rising rates, I ask them to tell me what kind of payment they expected when rates were "low" and what payment they are looking at now that rates are "high." I rarely get an answer to this question in dollars in cents. Meaning, many borrowers just get hung up on the fear part of the equation, but not the actual payment part of the equation. Let me know if you need help analyzing the best-case and worst-case scenarios, because this information will help you keep things in perspective.
Finally, without a firm close date or accepted offer from the bank, any lock you put in place is a false security, at best. If you don't meet that lock date, you will likely face costly extensions which may undermine your best intentions. Not to mention, a lock expiration date inherently causes stress in a situation in which you don't control all the variables.
Rates ALWAYS get better and worse over time. It is never a one way street. Again, keep things in perspective and let me know if I can help.