Mortgage Rate Lock

[Eugine]

The mortgage Rate Lock is an option that can occur between a bank or mortgage lender and the borrower of the mortgage loan. When the borrower is approved for a mortgage, the lender may offer the option to lock the interest rate on the mortgage loan, which prevents it from increasing for the period of time between the approval for the loan and the actual issuance of the loan. For example, if a borrower is approved for a mortgage at five percent interest, and it then takes 30 days to close on the sale of the home, a mortgage rate lock will guarantee that the borrower still receives that five percent interest rate, even if rates will have increased over those 30 days.