Lock-in
Today’s real estate word of the day is lock in or locked with an ED in to lock in an interest rate is two.
It’s an agreement in which the lender guaranteed a specific interest rate for a specific amount of time at certain costs. So the idea there is that your interest rate is set or your your terms are agreed to and for a specified amount of time so that you are not floating, that your rate’s not going up, not going down, not playing the market. So you’re locked in with your interest rate.
And as long as you close during that specified amount of time, then you’re OK now to lock in over a longer, more extended period of time. Say a new bill that takes a a long time is going to have a cost associated with it as far as either an adjustment to the interest rate to mitigate what that happens to be or a financial cost to lock in for a longer time frame.
There are some programs out there that may help alleviate this or a subsidy to do that, but it is typically something that you would float your rate for a longer time frame and then lock it in as you get closer to get the best possible rate.
You know, there you go. Locked in.
