Finance
A Florida lender provides a 'rate lock' to a borrower. This means:
AThe interest rate cannot ever change during the loan term
BThe lender guarantees the stated interest rate for a specified period, protecting the borrower from rate increases before closing✓ Correct
CThe borrower is locked in and cannot switch lenders
DThe rate is locked at the federal funds rate at the time of application
Explanation
A rate lock is a lender's commitment to hold a specific interest rate and points for a specified period (typically 30-60 days), regardless of market rate movements. This protects the borrower from rate increases during the loan processing period. Rate locks typically expire at closing — if the loan doesn't close within the lock period, the borrower may face rate renegotiation or extension fees.
Related Florida Finance Questions
- A Florida homebuyer with a VA loan does not pay private mortgage insurance (PMI) but instead pays a:
- A Florida buyer's mortgage payment includes PITI. 'PITI' stands for:
- In Florida, a 'purchase money mortgage' is one where:
- A Florida borrower's monthly gross income is $6,000. The lender's conventional loan guideline allows a maximum housing expense ratio of 28%. What is the maximum allowable monthly PITI payment?
- Under the Truth in Lending Act (TILA), the Annual Percentage Rate (APR) differs from the interest rate because the APR:
- A Florida homebuyer is applying for a VA loan. VA loans are guaranteed by the:
- Florida is known for its heavy use of title insurance in real estate closings. Title insurance in Florida typically includes all of the following EXCEPT:
- Under the Equal Credit Opportunity Act (ECOA), a lender in Florida may NOT deny a mortgage application based on:
Practice More Florida Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Florida Quiz →