Finance
What is a 'lock-in rate' (rate lock) in mortgage financing?
AA penalty preventing the borrower from refinancing
BA guarantee from the lender that the interest rate will not change for a specified period while the loan is being processed✓ Correct
CA minimum interest rate set by the Federal Reserve
DA rate that can only increase, never decrease
Explanation
A rate lock is a commitment from the lender to hold a specific interest rate for a set period (often 30-60 days). This protects the borrower from rate increases while the loan is being processed and underwritten.
Related California Finance Questions
- A loan in which the interest rate changes periodically based on a financial index is called a(n):
- What is 'negative amortization'?
- What is 'amortization' in mortgage lending?
- What type of loan is guaranteed by the Department of Veterans Affairs?
- Under California's Holden Act, lenders are prohibited from:
- What is the difference between APR and interest rate?
- What is a 'hard money loan'?
- In California, a non-judicial foreclosure (trustee's sale) on a deed of trust requires how many days of published notice before the sale?
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →