Allows a borrower to lock the interest rate of a loan at the current market rate upon agreement with the lender over a stipulated period of time. This agreement binds the lender and borrower; a lock deposit proves that both parties intend to follow through with the agreement. In addition, it protects either party if one of the parties chooses to break the agreement, in most cases, the borrower.
Related information about mortgage rate lock:
- 5 Questions About Your Rate Lock, Answered | Bankrate.com
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- Mortgage Rate Lock Definition | Investopedia
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Make sure you lock your mortgage rate if you're happy with it. Otherwise rates could rise and you'll be stuck with a higher rate.
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