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xmljar · Joined: 08 Apr 2007 Posts: 14 9.72 Dollars($)

hi all,

i have a pre-approval from a bank and they are asking me they can lock-in the rate, but they require a 1% of the total loan as a deposit. they say its refundable if something goes wrong, like inspection etc...

is this legal? do banks do tht?

vik

Guest

Yes, lock ins are done by banks, it helps you if the rates are going to rise further before your closing. You will be assured that the loan will have a rate lower than prevailing rate if the lock in rate happens to be lower.

Lowenkron

miller_st · Joined: 17 Jan 2007 Posts: 918 168.95 Dollars($)

Hi Xmljar,

There can be various options with rate lock ins like rate locks with locked in points or rate locks with floating points. Go through this page ( http://www.mortgagefit.com/lock-in.html ) for more information about Rate Locks and the various options that can be used with lock ins.

Miller

jerry · Posted: Wed May 09, 2007 2:24 am Post subject: RE: lock-in fee

Hi Xmljar,

Welcome to the forums.

The lock-in fee may or may not be refundable when you withdraw your loan application or in case credit is denied to you.

Thanks,
Jerry.

kenstampe · Posted: Wed May 09, 2007 10:45 pm Post subject:

1%? For how long are you locking in the rate?

Typically an interest rate lock can be done for 60 or 90 days with no fee. Lenders may charge a lock-in fee for longer term locks. From my experience a 1% lock in fee would be required on a 180 day lock and not all of the 1% is applied to the closing costs. The up-front fees are rarely refundable, mostly they allow the 1% to go towards closing costs as long as you close on time.

Guest

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Lock-in fee