Rate Lock

A rate lock is a commitment between a lender and buyer to hold a certain interest rate and other upfront charges for a certain length of time, normally while a loan is being processed. If you were to find a property that you were interested in purchasing, locking in the best rates could be to your advantage. You would then negotiate the terms with the lender and lock in a commitment. A loan can take up to several weeks to process, and you would be protected from any rise in interest rates or other costs as long as you had locked in that rate with the lender. A buyer must also be aware of the fact that with a rate lock commitment in place, he or she won't be able to take advantage of any possible rate decreases that may arise during this time.