Which statement about a lock-in agreement is true?

Which statement about a lock-in agreement is true?

• A. The rate, points, and duration
• B. The borrower's name only
• C. The appraisal value only
• D. The closing date only

Answer: (A)

A rate lock fixes the mortgage cost for a set period by guaranteeing a specific interest rate and the number of points for that time frame. This trio—rate, points, and duration—is what the lock covers, giving you stability against rate fluctuations during underwriting and before closing. The borrower's name is just identifying who is applying and isn’t part of the lock guarantee. Appraisal value affects loan approval and terms but isn’t something the rate lock fixes. The closing date is a target that can shift and isn’t protected by the rate lock. So the true description is that a lock-in covers the rate, points, and duration.

A rate lock fixes the mortgage cost for a set period by guaranteeing a specific interest rate and the number of points for that time frame. This trio—rate, points, and duration—is what the lock covers, giving you stability against rate fluctuations during underwriting and before closing. The borrower's name is just identifying who is applying and isn’t part of the lock guarantee. Appraisal value affects loan approval and terms but isn’t something the rate lock fixes. The closing date is a target that can shift and isn’t protected by the rate lock. So the true description is that a lock-in covers the rate, points, and duration.