Glossary of Terms

Lock-out Period 2019-03-01 08:00:00

Lock-out Period

A predetermined period of time following loan origination in which the loan cannot be prepaid, as set forth in the loan documents.  The lock-out period can vary greatly from no lockout period at all to nearly the entire loan term.  From a lender’s perspective, a lock-out clause is a form of call protection as it prevents prepayment. There is considerable time and effort involved to underwrite and originate a loan, thus the lender wants to ensure a certain level of minimal return on the loan.