Mortgage Dictionary
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Lock-In
The interest rate that a borrower pays on his/her mortgage is
not fixed on the date that the borrower applies for a loan.
That rate will vary daily, based on market conditions, until
the day that closing actually occurs.
To prevent the interest rate from "floating", the borrower
can lock in an existing rate. This means
that the borrower pays a fee and the lender agrees to
hold the points and interest rate constant. The lock-in
agreement is good for a specified length of time -
2 weeks, 30 days, 60 days, sometimes as long as a year.