Finance
A 'lock-in' or 'rate lock' agreement in Tennessee mortgage financing protects the borrower against:
AProperty value declines during the loan process
BInterest rate increases between application and closing✓ Correct
CLender-initiated loan cancellations
DIncreases in the down payment requirement
Explanation
A rate lock guarantees the borrower a specific interest rate for a defined period (typically 30-60 days), protecting them if market rates increase before closing. If rates decline during the lock period, the borrower is locked at the higher rate unless they have a 'float down' option.
Related Tennessee Finance Questions
- The Truth in Lending Act (TILA) requires lenders to disclose the:
- A Tennessee lender providing a mortgage must comply with the Homeowner Protection Act of 1998, which requires automatic cancellation of PMI when:
- A borrower's loan-to-value (LTV) ratio on a purchase is 95%. This is significant because:
- A Tennessee borrower who wants to lower their mortgage payment without refinancing might consider:
- A Tennessee buyer who cannot qualify for standard conventional financing due to recent foreclosure may be eligible for an FHA loan after a waiting period of at least:
- A 'jumbo loan' in Tennessee is one that:
- An adjustable-rate mortgage (ARM) includes a 'cap' provision that:
- The Equal Credit Opportunity Act (ECOA) prohibits lenders from discriminating in lending based on:
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