What is a Rate Lock?
This from the Detroit News:
Sometimes called a “lock-in period,” this is the 30- to 60-day time during which a mortgage lender agrees to hold the mortgage rate and points paid by the borrower to a set level. Frequently, the locked-in rate is the one that was in play when the application was first taken, but some lenders will allow the rate to float until a borrower sets the lock.
Some lenders may charge a flat fee or a percentage of the loan in exchange for locking in the rate in advance. Rate locks protect the borrower against rate increases that might occur between the time of the application and the actual granting of the loan.
