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A lock-in, also called a rate-lock or rate commitment, is a lender's promise to hold a certain interest rate and a certain number of points for you, usually for a specified period of time, while your loan application is processed.
Lock-in agreement means a written agreement between a mortgage lender, or a mortgage broker acting on behalf of a mortgage lender, and an applicant for a mortgage loan that establishes and sets an interest rate and the points to be charged in connection with a mortgage loan that is closed within the time period ...
A mortgage rate lock is an agreement between a borrower and a lender that allows the borrower to lock in the interest rate on a mortgage for a specified time period at the prevailing market interest rate. ... The lender may charge a lock fee, which the borrower must pay if he or she does not lock the interest rate.
The rate lock generally is good until the borrower can go through the process of closing on the loan. The borrower locks in a rate because it is the lowest rate offered at the time. Both the lender and the borrower agree to the terms of the rate lock. It is not a legally binding agreement, however, in obtaining a loan.
What happens if the rate lock expires before closing? The lender might offer to extend the rate lock, either free or for a fee. If they doesn't extend, that combination of rate and points might no longer be available and the loan would be based on the new prevailing terms. ... 375 percent of the loan amount.
A rate lock protects you from higher rates, but you won't get a lower rate, either, unless you have the option for a one-time 'float down. ' Once locked, the loan's interest rate won't change barring any changes to your application details. You're protected from higher rates, but you won't get a lower rate, either.
A rate lock protects you from higher rates, but you won't get a lower rate, either, unless you have the option for a one-time 'float down. ' Once locked, the loan's interest rate won't change barring any changes to your application details. You're protected from higher rates, but you won't get a lower rate, either.
Lock-ins are a big reason that borrowers choose to switch lenders. Imagine that you lock in a 30-year mortgage at a 4.5 percent rate for 30 days. ... Even if you let your lock expire, and don't close within 30 days, most lenders won't give you the lower rate at closing.
A rate lock commits the lender to honoring the rate at closing as long as it occurs before the lock expires. To a degree, it also commits the buyer to using that lender to close the loan. Borrowers can cancel a loan for a number of valid reasons; however, a borrower generally can't cancel a rate lock.
For most home shoppers, it's best to lock in your rate after your sign a purchase agreement. Don't lock too early If your loan doesn't process within your lock period, you'll lose the rate. It pays to shop around when looking for rates. Rate lock fees can vary from lender to lender.
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