Your property search has narrowed down to just three different properties and you know you will make your offer soon, but you also know that your loan application has already been preapproved and you have got a fantastic rate quote from your lender. But is that interest rate guaranteed?
An interest rate guarantee from a lender, called a "lock," is a promise by the lender to provide you with your selected rate as your loan moves through the approval process. When lenders quote interest rates to not just the general public but to individual loan applicants, interest rates are a moving target. Mortgage rates can change throughout the day, based upon market conditions, and no interest rate is guaranteed until you and the lender agree upon a rate lock.
There are no universal rules for lenders when it comes to locking an interest rate; lenders establish their own lock guidelines. Yet most lenders do however have a few basic requirements before locking in a rate for a borrower.
When lenders lock in a mortgage rate, they essentially "reserve" that rate for you, pulling funds from their credit line in order to fund your loan. Lenders take locks just as seriously as borrowers do. One of the first requirements in order to lock is to have a valid loan application on file. This means you won't be able to call up a bunch of different lenders from your phone and lock in various rates.
Second, a lender will require that you to have a property picked. If the loan is for a purchase, the property address will appear on the sales contract. If it is for a refinance, the loan application will have the property address listed on the application.
Finally, the lender will want to lock in your loan for a predetermined period. Most locks are written for a 30-day period but 45, 60 and even 90-day locks are common. Longer locks will usually require a non-refundable deposit from the borrower บ้าน มือสอง in order to secure a rate for an extended period.
But if you meet these basic guidelines and are ready to set your rate, call your lender and tell them you're ready to lock. Let's get this baby started!
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