Lending Terms

Rate Lock

A commitment from a lender to hold a specified interest rate for a defined period while the loan is processed. Rate locks protect borrowers from interest rate increases during underwriting. They typically cost 0.5-1.0% of the loan amount for 30-60 day locks, with longer locks costing more. Some lenders offer "float-down" provisions if rates decline.

Related Terms

Spread

The margin added to a base index rate (such as SOFR or Treasury) to determine a loan's interest rate. For example, a loan priced at "SOFR + 250" has a 2.5% spread over the SOFR index. Spreads reflect credit risk, property type, leverage, and market conditions. Lower spreads indicate more favorable pricing.

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Rate Lock

Related Terms

Spread

More Lending Terms Terms

Loan Assumption

Spread

SOFR (Secured Overnight Financing Rate)

Rate Cap

Carve-Outs (Bad Boy Guarantees)

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