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Everything Consumers Need to Know About Mortgage Lock-Ins
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When you hear “lock-in,” you may be thinking it’s a
perfect solution
for a rate that never changes. But
you really need to think about it
before you sign up for a mortgage
with lock-in rates.
While you’re
shopping around for the very best lender, you’ll find
that as you shop, lenders will quote you different
rates. And once you go back to an original lender,
you could find that your quote has gone up – because you
didn’t have a locked in rate during the application
process.
You don’t want to
go to all that trouble to find the best lender, decide
to close on your home, and then discover at closing that
you’re paying much more than you thought you’d
be.
What you should
know as a consumer is that the rate you’re quoted is the
rate at that very exact time. If you sign on the
doted line right then and there, then there’s nothing to
worry about. But wait even just 24 hours and your
great interest and points may disappear into thin
air!
You have to find
out ahead of time if the lender is willing to offer a
lock-in rate. With a lock-in, the lender promises
to hold the points and interest rate for you at the same
point it is when he first quoted you for a set period of
time.
Obviously, he’s
not going to hold it for two years, but weeks – or even
months is negotiable. Did you know that your
interest rates and points can change even during the
application approval process?
So even though you
applied for a certain rate and submitted your
application, once your application is approved, it could
be higher! The loan approval process can take
weeks or longer due to excessive documentation
Ask your lender to
put your lock-in rates in writing. Find out the
terms ahead of time since some lenders charge a nominal
fee to give you the lock-in rates. Make sure you
get your fees refunded if the lock-in agreement
expires.
Information contained herein is deemed accurate and correct, but
no warranty is implied or given. Please consult
a financial advisor for specific advice pertaining to
your particular situation. © 2004 Apex Personal
Loans Store. All Rights Reserved.
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