Mortgage Rate Lock-In

When you’re ready to settle on your loan, you’ll want to get the loan terms that you’ve locked-in. To increase that likelihood, it is important to learn as much as you can about what the lender is promising you before you apply for a loan. Ask for the following information when you shop for a loan:

Lock-Ins and Fees

Does the lender offer a lock-in of the interest rate and points?

When will the lender let you lock in the interest rate and points? When you apply? When the loan is approved?

Will the lock-in be in writing? If the lock-in is not in writing, you will have no record of the lender’s agreement with you in case of a dispute.

Does the lender charge a fee to lock in your interest rate? Does the fee increase for longer lock-in periods? If so, how much?

If you have locked in a rate, and the lender’s rate drops, can you lock in at the lower rate? Does the lender charge you an additional fee to lock in the lower rate?

Can you float your interest rate and points for now, and lock them in later?

Loan Processing Time

How long does the lender expect to take to process your loan?

What has been the lender’s average time for processing loans recently?

Has the lender’s loan volume increased? Heavy volume might increase the lender’s average processing time.

Expiration of Lock-ins

What rate will be charged if the lock-in expires before settlement-the rate in effect when the lock-in expires?

If you don’t settle within the lock-in period, will the lender refund some or all of your application fee or lock-in fees if you decide to cancel the loan application?

If your lock-in expires and you want to get another lock-in at the rate in effect at the time of the expiration, will the lender charge an additional fee for the second lock-in?

Complaints About Lock-Ins

Knowing what to look for puts you in a better position to decide whether, when, and how long to lock in mortgage terms. Also, by helping to keep the loan process moving, you can lessen the chance that your lock-in will run out before settlement.

But what if your lock-in does lapse? If you believe that the lapse was due to delays caused by the lender or someone else involved in the loan process, you should try first to reach a mutually satisfactory agreement with the lender. If that effort fails, consider writing to the appropriate state or federal regulatory agency.

Some lender actions, such as offering lock-in terms which are impossible to fulfill, failing to process your loan diligently, or causing your lock-in to expire are improper-and may even be illegal. In addition, because you may have contractual rights under your lockin or loan commitment, you may want to consult with an attorney. Be aware, though, that complaints may not be resolved as quickly as may be necessary for a home purchase.

Depending upon their authority under applicable state or federal law, regulatory agencies may either attempt to help you resolve your complaint directly or record your complaint and recommend other action.

For more helpful mortgage tips on mortgage rate lock-ins, mortgage refinancing, home loans, reverse mortgages or a home equity line of credit, contact FreeLoanComparison.com today!

Last update: November 14, 2008