Finance
A 'lock-in period' in a Pennsylvania mortgage means:
AThe property title is locked with the lender until closing
BThe interest rate is guaranteed for a specified period between application and closing✓ Correct
CThe borrower cannot prepay the loan during the locked period
DThe lender cannot increase fees during underwriting
Explanation
A rate lock guarantees the interest rate for a specified period (30, 45, 60 days) between loan application and closing. If market rates rise during this period, the borrower's rate remains locked.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Promissory NoteA written promise to repay a loan under specified terms — the borrower's personal financial obligation in a real estate transaction.
Math Concepts
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