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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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what happens when a rate lock expires?
do you have to pay more to keep the rate, even if the rate has come down? i am so stressing myself over this whole process!
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Posted 4/10/12 4:51 PM  |
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SecretTTCer
LIF Adult
Member since 6/08 2284 total posts
Name:
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Re: what happens when a rate lock expires?
I am pretty sure you can't close for a period of time.
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| Posted 4/10/12 6:27 PM |
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Cheeks24
Living a dream
Member since 1/08 8589 total posts
Name:
Cheeks
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Re: what happens when a rate lock expires?
You would pay a penalty to keep it. If it has dropped do it over to get the lower rate.
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| Posted 4/10/12 9:54 PM |
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Babymakin
LIF Adult
Member since 12/10 920 total posts
Name:
Sarah
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Re: what happens when a rate lock expires?
Your screwed.
It means if rates have gone up you will get a worse rate.
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| Posted 4/10/12 10:42 PM |
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8ternity
<3
Member since 11/08 10586 total posts
Name:
Formally NYPD-Wife
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Re: what happens when a rate lock expires?
I heard there is a weekly fee to keep the rate...I would confirm with your mortgage broker.
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| Posted 4/10/12 11:07 PM |
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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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Re: what happens when a rate lock expires?
ugh thanks.. this is so frustrating. The lender locked in at 4.135% with .35 points, as the rates were going up a few weeks ago (we didn't ask him to do this, he just did this for all his clients). Now I see rates are probably below 4% again. Problem is we have until the end of the month to close, and trying to get a CEMA done to transfer the mortgage tax. I am already out 1k in this process if I back out 
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| Posted 4/11/12 8:51 AM |
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Re: what happens when a rate lock expires?
It has no bearing on whether or not you can close, only on the rate you can get.
Rates have been pretty stable but recently went up a little bit.
Yes, you can pay to extend a rate lock, but sometimes it is a lot of money. I recently had a large bank quote a customer $2300 to extend the rate. If rates haven't gone up significantly, you may be better off just locking in a new rate. Also, if the delay in closing is due to an issue on the bank's part (I've had situations where banks have just dragged their feet on giving the clear to close, when the parties have been ready, wiling, and able), you can negotiate with the bank and have them eat the cost of the rate extension.
I always advise my customers NOT to lock a rate unless you know closing is imminent (and I know the mortgage guy I recommend a lot won't lock rates until obstacles to closing are cleared away). Rate locks are typically good for only 30 days... sometimes you can get a longer lock (45 to 60 days), but it will generally cost you more to lock for a longer period. If you know the sellers won't close until the end of May, don't lock a rate in early April. If you are buying a co-op and don't yet have board approval, don't lock the rate. Or if you are still working out issues in the home re: title or COs, and you aren't sure when they will be resolved, you shouldn't lock a rate, unless you are prepared to pay to extend it.
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| Posted 4/11/12 8:54 AM |
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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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Re: what happens when a rate lock expires?
Posted by Century 21 Dallow - Christine Braun
It has no bearing on whether or not you can close, only on the rate you can get.
Rates have been pretty stable but recently went up a little bit.
Yes, you can pay to extend a rate lock, but sometimes it is a lot of money. I recently had a large bank quote a customer $2300 to extend the rate. If rates haven't gone up significantly, you may be better off just locking in a new rate. Also, if the delay in closing is due to an issue on the bank's part (I've had situations where banks have just dragged their feet on giving the clear to close, when the parties have been ready, wiling, and able), you can negotiate with the bank and have them eat the cost of the rate extension.
I always advise my customers NOT to lock a rate unless you know closing is imminent (and I know the mortgage guy I recommend a lot won't lock rates until obstacles to closing are cleared away). Rate locks are typically good for only 30 days... sometimes you can get a longer lock (45 to 60 days), but it will generally cost you more to lock for a longer period. If you know the sellers won't close until the end of May, don't lock a rate in early April. If you are buying a co-op and don't yet have board approval, don't lock the rate. Or if you are still working out issues in the home re: title or COs, and you aren't sure when they will be resolved, you shouldn't lock a rate, unless you are prepared to pay to extend it.
Yeah that the thing- we didn't ask the broker to lock the rate, he just went ahead and did it. Now he wants me to sign and send back a rate lock commitment sheet.
ETA: this is for a refinance
Message edited 4/11/2012 8:56:47 AM.
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| Posted 4/11/12 8:55 AM |
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Re: what happens when a rate lock expires?
I am confused -- If it's a refi, won't you be able to close asap? Are you worried that you locked the rate and now rates will come down? Because they've recently gone up a bit and everything I've heard is they aren't going to go down again anytime soon. They are still crazy low, though.
Sometimes I have clients that see "teaser" rates advertised elsewhere and think they are not getting a good deal, but keep in mind it all depends on the loan product and your individual circumstances. I have clients that are getting a conventional with a rate of like 4%, which is great, but see other lenders advertising rates in the high 3s. But they don't realize those are FHA rates, and if they went that route, they'd be paying mortgage insurance which would effectively make the FHA loan more expensive (even with the lower rate).
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| Posted 4/11/12 9:20 AM |
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Deeluvsvinny
DONE
Member since 10/08 4952 total posts
Name:
Whatever
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Re: what happens when a rate lock expires?
You can pay points to extend the rate...it goes by increments of 7, 15 or 30 days. If the rate is now lower than when you locked, you can possibly renegogiate your rate, but it needs to have dropped by a a certain amount, usually at least 1/2 point.
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| Posted 4/11/12 10:46 AM |
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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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Re: what happens when a rate lock expires?
Posted by Century 21 Dallow - Christine Braun
I am confused -- If it's a refi, won't you be able to close asap? Are you worried that you locked the rate and now rates will come down? Because they've recently gone up a bit and everything I've heard is they aren't going to go down again anytime soon. They are still crazy low, though.
Sometimes I have clients that see "teaser" rates advertised elsewhere and think they are not getting a good deal, but keep in mind it all depends on the loan product and your individual circumstances. I have clients that are getting a conventional with a rate of like 4%, which is great, but see other lenders advertising rates in the high 3s. But they don't realize those are FHA rates, and if they went that route, they'd be paying mortgage insurance which would effectively make the FHA loan more expensive (even with the lower rate).
Its a Refi, but we are waiting for the CEMA from my current bank, to be transferred to the new lender. This would save us 2k in mortgage tax. I would have liked to lock in when the CEMA actually went through, but it looks like the broker jumped the gun.
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| Posted 4/11/12 10:52 AM |
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JDubs
different, not less
Member since 7/09 13160 total posts
Name:
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Re: what happens when a rate lock expires?
Posted by Deeluvsvinny
You can pay points to extend the rate...it goes by increments of 7, 15 or 30 days. If the rate is now lower than when you locked, you can possibly renegogiate your rate, but it needs to have dropped by a a certain amount, usually at least 1/2 point.
ugh yeah, this is what I was afraid of.... I know I can always back out, but it just stinks that I am already out 1k.
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| Posted 4/11/12 10:52 AM |
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