Posted on: 08th May, 2007 01:42 pm
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
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
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
Lowenkron
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
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
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.
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.
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.
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.
"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"
This federal reserve page has very good information about rate locks, I think you should have a look at it: http://www.federalreserve.gov/pubs/lockins/default.htm
Marseille
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"
This federal reserve page has very good information about rate locks, I think you should have a look at it: http://www.federalreserve.gov/pubs/lockins/default.htm
Marseille