Rate Lock
A lender's guarantee that a specific interest rate and pricing will be held for a set period.
Definition
A rate lock freezes your interest rate and points for a specified number of days — commonly 15, 30, 45, or 60 — while your loan is being processed. If market rates rise during the lock period, your rate stays the same. However, if rates drop, you're typically locked into the higher rate unless you negotiate a float-down option. Longer lock periods usually cost more because the lender bears additional risk. If your loan doesn't close before the lock expires, you may need to pay for an extension or accept the current market rate.
How This Relates to DSCR Loans
DSCR lock periods of 30-45 days are standard. Longer locks carry higher pricing, so aligning your lock period with your realistic closing timeline saves money.
Related Terms
Interest Rate
The percentage charged by a lender for borrowing money, applied to the outstanding loan balance.
Points (Discount Points)
Upfront fees paid to the lender to reduce the interest rate, where one point equals 1% of the loan amount.
Closing Costs
Fees and expenses paid at the closing of a real estate transaction beyond the purchase price.
Underwriting
The process by which a lender evaluates the risk of a loan application before approving it.
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