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Is an email or fax a legally binding notice to lock in a mortgage interest rate?

I am told an email is not legally binding. However, a document signed by both buyers is required in order to lock in a rate. In the absence of a signed document the buyers are considered floating and can be charged a lower or higher rate, depending on what occurs in the market, between the time the email was sent and the document signed.

steve2 · Posted: Wed Nov 26, 2008 12:31 pm Post subject:

jbamba,

Each lender has a different set of rules that they follow to lock a loan. For me, as an example, I have to have a complete application, a signed contract (if it is a purchase), and a check payable to the appraiser before I can lock.

I'm not entirely sure about the legalities. Maybe there is a real estate attorney in the forum that will respond to that more specifically.

"http://www.steverussellonline.com/blog/"

[Link deactivated as per forum rules. Thanks.]

elisahoyos · Posted: Wed Nov 26, 2008 8:42 pm Post subject: it depends on the lender

Jbamba,

It will depend on your lender's rules but also on what state you are in and if it is regulated. Some lenders will accept a call in for a lock. And an E-mail will do just fine for others. The borrower does have to be notified prior to locking the loan since there are fees involved with re-locking rates and if you lock and the lock expires you might be subject to fees in the form of points in order to re-lock at a lower rate . there are also fees related to extending locks and all sorts of stuff. As far as it being legally binding... well once the loan is locked ... it's locked and it will cost someone in order to alter the lock. this tid-bit is based on past experiences with lenders in Arizona and California.

jameshogg · Posted: Wed Nov 26, 2008 10:43 pm Post subject:

Hi Jbamba,

I agree with both Elisa and Steve. Accepting a email notification for rate lock will be totally the lender's discretion. I personally believe that signing a contract which states the rate lock will be a better option than an email. You should ask your lender whether he will accept a rate lock through email or a contract. If he agrees to accept the email, you can go for it.

Thanks

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LEGALITY INVOLVING RATE LOCK-IN