Finance
What is the purpose of a 'lock-in' or rate lock in a Delaware mortgage transaction?
ATo prevent the borrower from switching lenders
BA lender's commitment to hold a specific interest rate for a set period while the loan is processed✓ Correct
CTo lock the purchase price when the contract is signed
DTo secure the escrow account from unauthorized disbursement
Explanation
A rate lock is a lender's guarantee to hold a specific interest rate (and points) for a borrower for a set period (e.g., 30, 45, or 60 days) while the loan application is processed and the property is closed.
Related Delaware Finance Questions
- What is a 'short-term rental' (Airbnb, VRBO) and how does it affect Delaware real estate financing?
- What is a 'teaser rate' in a Delaware adjustable-rate mortgage?
- A Delaware borrower's gross monthly income is $5,000. Using a 28% front-end ratio, what is the maximum monthly PITI payment the borrower qualifies for?
- What is a 'construction loan' in Delaware?
- Which loan type is designed for rural homebuyers and is backed by the USDA?
- Which type of mortgage loan is insured by the Federal Housing Administration (FHA)?
- Which federal law requires lenders to provide the Loan Estimate form within 3 business days of receiving a mortgage application?
- Which federal law prohibits lenders from discriminating in lending based on race, color, religion, national origin, sex, marital status, or age?
Practice More Delaware Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Delaware Quiz →