Lock-in fee

xmljar · Joined: 08 Apr 2007 Posts: 13 9.31 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 0.10 Dollars($)

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: 917 168.82 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 0.10 Dollars($)

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