At the time of loan application, the applicant has the ability to choose to enter into an agreement with the lender to guarantee the current interest rate for a specified time period. This is called a rate lock period. On the other hand the applicant, for whatever reason, may not wish to lock into this type of an agreement with the lender. The applicant then chooses to float the interest rate until prior to the closing. Locking and/or floating the interest should be discussed with your sales representative prior to the application session.

Posted in: Terminology – The Language of Mortgage Lending