Posted: Mon Apr 17, 2006 2:40 pm Post subject: rate lock in to protect us
I am going to buy my first house. We contacted the lender after signing the real estate contract was signed and gave him a formal application. Now, the lender has asked if we wanted to go for a rate lock in. The lender explained us that a rate lock in can protect us against any change in the market rate as long as the settlement is under process by the time mentioned in the sales contract. I am new to this field and not aware of this term. Is it going to really protect us? _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
Yes, you must go for a rate lock-in and get all the terms and conditions in writing. Most of the lenders stick to their lock-in commitments. But to be in a safe position, it is better to have everything in writing.
It is a good offer. I think you should go for it. This will save you in this rising market. The lenders generally honor their commitment of lock-in interest rate. _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
It is no doubt a good option to go for but, as others suggested you must ask for a written statement.
The statement must hold all the terms and conditions including the time period for lock-in, rate that is locked-in.
It must also mention whether any money is required to be paid to lock-in the rate. The statement should be signed by an authorized person of the mortgage company. _________________ Lets help each other. Try my blog
Congratulations for your first home!!! This is a period of anxiety for the first time buyers and even I went through this period. But don't worry, everything will pass out smoothly. Only be a little careful.
It is important to lock-in your interest especially with the present market condition where rates are changing and increasing frequently.
Others have suggested it correctly to get everything in writing although lenders generally don't disagree to their commitment regarding loan commitment. At least through the statement you are going to get a binding and a legal commitment from your lender that the rate is not going to change from the date of the application for a specified time period, while your loan application gets processed.
This lock-in period is usually 30 - 60 days from the date of application. Processing of your loan application may take some time and during this time the mortgage rate can change in the market. If you lock-in your rate then your rate will be protected while your application is under process.
If the lender doesn't agree to give the statement in writing then you must look for another lender and should not go for any oral commitment.
Posted: Mon Apr 17, 2006 7:14 pm Post subject: RE:
Hi,
You must go for it. Market is on an upward trend and rate lock will save you from the rate rise in the future. And the fees that lenders charge is very minimal.
jameshogg
