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GLOSSARY

Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
 
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50% - Moderately

Rate Lock-in


Synonyms:interest rate lock-in, lock-in, mortgage rate lock-in, rate hold
Filed Under: financial-banking, mortgages
Tags: banking, mortgage, rates
 

Definition of rate lock-in

rate lock-in
1. A written agreement or contract in which the lender guarantees the borrower a specified interest rate, provided the loan closes within a set time period.

Related Terms and Acronyms:

  • commitment   A written agreement from a lender promising to lend money on certain terms for a specified time period.
  • lock-in   A lender's guarantee that the mortgage rate quoted will not change for a specific period. The borrower wants the lock to stay in effect until closing.
  • mortgage rate   The interest rate on a mortgage loan.
      ➥  You can compare mortgage rates using this website by clicking 'Rates' above.
  • one-year adjustable   Mortgage whose annual rate changes yearly. The rate is usually based on movements of a published index plus a specified margin, chosen by the lender.
  • pre-approval   A process that mortgage lenders use to determine how much money they would lend you based on a thorough review of your financial situation. Lenders issue a pre-approval letter which strengthens your position when bidding on a home, as it shows sellers that you will be able to raise funds needed to purchase.
  • purchase agreement   A written promise to pay a specific amount for a property at a specified time. The purchase agreement is a written statement of the offer, which both the borrower and the seller will sign if the offer is accepted.
  • rate   Percentage a borrower pays for the use of money, usually expressed as an annual percentage.
  • rate hold   The length of time, typically between 60 and 120 days, that a lender will guarantee a loan's interest rate once you are locked in.
  • variable rate mortgage (VRM)   Home loan in which the interest rate is changed periodically based on a standard financial index. Also called an "Adjustable-rate Mortgage."
      ➥  A type of mortgage loan offered by brokers and lenders.

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