Lock-In Agreement is an agreement between the borrower and mortgage lender. It specifies the terms and conditions, including the interest rate and loan program, for a specific period.
In a lock-in agreement, the lender guarantees a particular interest rate and loan program for the borrower during the lock-in period. This means that the borrower is protected from potential interest rate increases during that period, even if market rates rise.
The lock-in period is usually a fixed duration, such as 30 days or 60 days.
The terms and conditions outlined in a lock-in agreement may include the interest rate, loan type (such as a fixed-rate or adjustable-rate mortgage), loan duration, points, and any other relevant fees or costs associated with the loan. The agreement helps both the borrower and the lender by providing certainty and protection against market fluctuations during the lock-in period.
It’s important to note that the specifics of lock-in agreements can vary depending on the lender and the loan program. Borrowers should carefully review and understand the terms and conditions of such agreements before signing them, as it can have implications for their mortgage loan and financial situation.
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