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Components
of Rate Lock
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Loan Program: A
description of the loan features including whether the
interest rate changes and how long the loan will last. Interest
Rate: Normally it is the cost to borrow money
expressed as a percentage per year or The
percentage to be paid by you on the capital borrowed.
Interest rates vary from loan provider to loan provider.
A standard calculation of the total cost to you of
borrowing money is presented as Annual Percentage Rate
(APR) charge. You can use APR to compare the cost of
various loans. The APR will include the interest rate
charged, and any other charges that are associated with
taking the loan. Points: It is an upfront cash
payment required by the lender as part of the charge for
the loan, expressed as a percent of the loan amount;
e.g., "2 points" means a charge equal to 2% of
the loan balance. Length of the
lock: A
rate lock is issued for a fixed number of days -
usually 30, 45, or 60 days. The longer the duration,
the higher the rate and/or points. It is important
that the term of the rate lock is sufficient to allow
for the closing of the loan.
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