Lock Rate Extension Sample Clauses
A Lock Rate Extension clause allows a borrower to extend the period during which an agreed-upon interest rate is guaranteed for their loan. Typically, this clause outlines the conditions under which the extension can be requested, any associated fees, and the maximum length of the extension period. By providing a mechanism to prolong the rate lock, it protects borrowers from potential interest rate increases if their loan closing is delayed, ensuring cost predictability and reducing financial uncertainty.
Lock Rate Extension. In the event that the mortgage loan is not purchased within the rate lock period, the Lender may request a one-time extension of the rate lock period. The lender may choose either a 15- or 30-day rate lock extension to avoid the expiration of the interest rate. The fee for a 15-day extension is .125% of the total loan amount and the fee for a 30-day extension is .25% of the total loan amount. This cost may or may not be passed along to the Borrower by the Lender.