Dictionary of Banking Terms: lock-in period
lock-in period
- time period, usually 30 to 60 days, a mortgage lender agrees to hold the mortgage rate and points payable by the borrower to the rate quoted when the application was taken. Also called rate lock. It is not the same as a loan commitment, although some commitments may contain a lock-in provision. This protects the borrower against rate increases if interest rates rise before the loan closing takes place. Lenders may charge a flat fee or a percentage of the mortgage loan, or add a fraction of a percentage point to the loan's interest rate.
- period of time in which a mortgagor cannot refinance a mortgage without paying a penalty to the lender.
Dictionary of Real Estate Terms: lock-in period
lock-in period
the period during which a loan cannot be prepaid; see closed period.
Example: The Leonards could not refinance their mortgage during the two-year lock-in period.The period of a loan commitment, i.e., 45 or 60 days during which the lender agrees to a certain interest rate.
Example: Fearful that interest rates would rise and make their new home too costly, the Leonards got a loan with a 60-day lockin period. By the end of the period, they hoped to close the sale.
