Locking the Interest Rate - Lenders lock (meaning "guarantee") the rate and points for a specified period. For example If a fixed-rate mortgage (FRM) is locked at 5.5 percent and one point for 45 days, the lender is committed to closing at that price anytime within the following 45 days. For 30- or 60-day locks, expect to pay about one-eighth of a point less or more, respectively.Once you are told that your rate is locked always ask for a rate lock confirmation to verify that your rate has actually been locked.
You should be highly suspicious of an bank or mortgage agent, who has not locked and guaranteed an interest rate, by no later than the date you sign the disclosures.
Some non conforming loans cannot be locked and the interest rate will float to close. Ask your mortgage broker to keep you informed on any rate changes that may occur prior to close.
Remember that once you lock, the rate cannot be changed, even if market interest rates go down.
Lock a rate for a period of time within which one can reasonably expect to close the loan. If for any reason a borrower cannot close within the lock period, in addition to charging an extention fee, some banks also would not allow the borrower to re-lock at a lower rate for 30 days should the market interest rate falls below the original locked rate.
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This
is not a commitment to lend. Restrictions may apply. Information is
subject to change without notice. All loans are subject to credit approval.
Equal Housing Opportunity.