Investor Glossary-rate lockInvestor Glossary-rate lockInvestor Glossary-rate lockInvestor Glossary-rate lockInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Rate Lock

The HTML to link to this page
 

Particularly in residential real estate finance, a rate lock is a lender's commitment for a specific period of time to make a mortgage loan at a specified interest rate. The rate lock is an important practice for buyers, who can be sure that borrowing costs do not increase between the time a home purchase goes to contract and when the transaction finally closes. Common rate lock periods are 30 and 60 days. Many lenders will allow the borrower to "buy" an extension of the rate lock period by paying a fee, such as a fraction of a point. The rate lock may be for much longer with a new-construction loan, perhaps 180 days. Usually, the rate lock is for a specific property, but a special rate lock called the lock-and-shop offered by some lenders permits a borrower line up financing before identifying the home. A float down is an option some lenders offer with their rate lock that allows the borrower to reset the interest rate if rates drop, usually one time during the rate lock period.



Rate this rate lock definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: implied volatility, EBITDA, minority interest, VIX, class C shares, 1035 exchange, real GDP, 401a, labor relations, per diem, required rate of return, reverse mortgage, stock market close, inflation, LIBOR, margin rate, 144a, debt service coverage, diluted share, in escrow, dividends payable, retained earnings, option premium, Key Rate Duration, quality assurance, FTSE, liquidity ratio, irrevocable trust, command economy, deferred revenue, wholly-owned subsidiary, cancelled check, covered put, average price per share, APR, Zero Cost Collar, 1031 exchange, current ratio, FICO score, balance sheet, annual return, stock split, deferred tax, ex-dividend date, phantom income, ex-dividend, open position, risk management, limit order


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use