When you lock your doors at night, you think, “Phew, I’m safe!” Locks mean safety. Locks mean security. And it turns out the same is true in the world of home loans, where you may encounter the term “mortgage rate lock.” So what exactly does this refer to?
Mortgage rate lock explained
A mortgage rate lock is a commitment by a lender to give you a home loan at a specific interest rate, provided you close on your home in a certain period of time (which is typically 30 days from when you’re approved for your loan). This rate lock offers protection against fluctuating interest rates—useful considering that even a quarter of a percentage point can take a huge bite out of your housing budget over time.
Read more from Realtor.com.
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