The Deep Secrets of locking interest rates - Mortgage Interest Rates in New Jersey - Locking your Home Interest Rate

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locking your interest rate


Information on locking your mortgage interest rate, securing that home interest rate, can be very important at times. This information should be given to the borrower when shopping for a mortgage. What I know is that not all loan officers or lenders are on the same playing field when giving you such information to when and how you can lock your mortgage interest rate.

Current interest rates are at an all time low. Many are seeking a low interest rate and this is usually the first thing on the borrowers mind.  Your focus should not be on the best interest rate. What you should know is not always told to you.

So when are you allowed to lock in your mortgage interest rate? There is only one answer. Can you guess it?



list of when you can lock in your mortgage interest rate

Lock-in period for your mortgage interest rate :


 - Once the appraisal has been completed

 - You don't know, because you were never told

 - 5 days prior to your settlement date

 - At the time of application

 - Once your mortgage application has been approved

 - You don't know, because you never asked



So what do you think the answer is? Hey Johnny, tell us that answer....

~ At the time of application ~


A very simple answer. And believe it or not, just recently, I have heard these other answers when borrowers were shopping for mortgage interest rates. In some cases, when I even asked a borrower, once they picked someone other than myself, if they were locking in at that moment.  Some would say, "we didn't go over that part." Huh??? My common sense thinking then says.. well, how do you call that shopping properly. Think about it.  If I offer you the lowest interest rate with low closing costs, and it beats everyone else out, yet I don't or can't lock you in until down the road???  Think about it... who is to say that loan officer would be ethical enough to still give you that great deal.  Do you know what the biggest excuse is when not offering the same rate later on in the process? Mortgage Interest Rates have gotten worse. People, rates move daily, sometimes two to three times a day.


Why does it seem to be a deep dark secret about telling the borrower about the procedures of locking in an interest rate?

Maybe so they don't have to honor what they promised you?  Or what they guaranteed you? Ah, sales talk, promise and guarantee, yet they don't have you sign a lock-in form and you are still floating 10 days into the mortgage process. Not saying that you have to lock-in at time of application, but if this is not explained to you properly, will you be getting the best rate?



Summary : When shopping for that mortgage, aka shopping for that mortgage interest rate (since everyone wants that lowest rate), just be very careful. If the loan officer that you are dealing with doesn't go over the specifics of when and how to lock in your home interest rate in the beginning, seek someone else. Even though some of you have heard that the government has come out with some checks and balances on the good faith estimate, there are still loop holes on how and when things can be changed, and why. Again, just be prepared and armed with good solid information before you shop for that mortgage interest rate.



Some tips on shopping for a mortgage :



What triggered my mind to write about this post was something that John Cannata wrote, My hand is not in your pocket, so don't reach in mine. And for the fact that I read someones post about when you can lock in, and it was very misleading and incorrect.


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Copyright © 2011 by Jeff Belonger of Infinity Home Mortgage Company, Inc


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Tim Storm
Fairway Independent Mortgage Corporation - Irvine, CA
Orange County FHA and VA Home Loan Specialist

Amen. Borrowers typically have no idea of how to handle a rate lock or when they can lock the rate. I have not been shopped much this year, but in past years this was a big problem. Every once in a while I'll hear of some unbelievable rate quote for a borrower with a 660 FICO, cashout refi at 80% LTV on a condo. Suddenly that 4% rate at 1 point turns into a 5.75 point deal, or the rate goes up to 5% along with additional points. With all the pricing hits involved in gving someone an accurate quote, borrowers need to know they can't just call lenders and ask "what is your best interest rate."

Oct 20, 2010 04:55 AM #2
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Jeff this is a problem many home buyers face.  I sure hopr more lenders will be upfront in explaining rate lock to potential clients.

Oct 20, 2010 05:03 AM #3
ReShawna Leaven
Keller Williams Realty - Bowie, MD
Experience. Knowledge. RESULTS.

Great posting, Jeff! It's important to know the facts :)

Oct 20, 2010 05:15 AM #4
TeamCHI - Complete Home Inspections, Inc.
Complete Home Inspections, Inc. - Brentwood, TN
Home Inspectons - Nashville, TN area - 615.661.029

Great informative post Jeff. Although I do not have a dog in this hunt, there are those who will find the information helpful...

Oct 20, 2010 05:56 AM #5
Chad Barris
Guaranteed Rate - Parsippany, NJ

I did enjoy reading this posting. It is important to know the facts and go to a trusted lender who will be upfront and honest when helping borrowers and potential clientele.

Oct 20, 2010 06:17 AM #6
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans


TIM... . they actually don't and if they especially don't know while shopping, will that borrower sometimes make a bad decision based on what they think they will know?  Sure, we can argue the rate quotes all day long, but what good is the rate if you can't lock until later down the road.  thanks for your input.

JENNIFER.. . I am not sure if more are upfront or not... all I can do is write about those that aren't after talking to a potential client, and hear from them what they were told.  thanks

RESHAWNA... .  I have always been big on the facts and have prided myself on this... thanks for the compliment.

MICHAEL... .  I hope so, hence one reason why I like to write these kinds of posts.  And thanks for the compliment.

CHAD... .  I think we all would agree on this and like this... but what is trust? One particular borrower that I lost a month ago, because he was $500 cheaper and because the borrower trusted him since he was the first person that he spoke to.. and felt comfortable with. Yet, I found out after the fact, that this same borrower couldn't lock in until after the appraisal. But this was never brought up.. hence why I had to mention trust.  I think it's an over abused and misused used term.  thanks for the kind words..


Oct 20, 2010 07:35 AM #7
Team Honeycutt
Allen Tate - Concord, NC

This illustrates why you need to work with a lender you can trust>

Oct 20, 2010 08:57 AM #8
Paul McFadden
Paratex - Seattle, WA
Pest Control, Seattle, WA.

Jeff: That's good advice. Thanks! I think some of the LO's still left in our business look upon it as a game. They play a little fast and loose with the numbers. If they weren't in this business, they'd be selling cars! My apologies to everyone out there who is either in the car business or was at some point. Take care.

Oct 20, 2010 10:26 AM #9
Patricia Kennedy
Redfin - Washington, DC
Home in the Capital

Wonderful advice, as always, Jeff!  No wonder it has a little gold star - rats!  They beat me to it again!

Oct 20, 2010 10:30 AM #10
Lenn Harley
Lenn Harley,, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

And when you do lock, get a copy of the rate lock document.  In a stable or rising rate market, it's not usually a problem.

On one occassion, a buyer who thought he was locked (did it himself) was not.  The market was falling dramatically.  Rates a week prior to closing were a full percentage lower than when the buyer thought he had locked.  I called to get the lender fees so I could do a closing cost estimate so my buyer would know how much cash to bring and the processor let it slip that there was no lock. 

Speaking to the loan officer, I requested a copy of the lock transaction and he couldn't produce one.   After a few words, the lock was executed at market for that day, a full percentage point lower than the buyer thought he was going to get.  Not a point, a percentage.  The price the buyer was paying was a lot less from an investor when I found out that there was no lock. 

The buyer should never have attempted to lock himself when he did with rates plummeting.  The loan officer should never have let him believe that he was locked.  If the processor hadn't slipped up, what would have happened to the difference??????  In inquiring minds want to know.

These ae the types of experiences that make me want a paper record of every transaction, lock, appraisal ordered, etc. 

Oct 20, 2010 11:10 AM #11
Judith Knutson
REMAX River Cities. Inc - Davenport, IA

Great stuff to remember when buying or selling. Thanks Jeff!

Oct 20, 2010 11:37 AM #12
Jeff Belonger
Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ
The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans


ALLEN... . I would hope so, thanks...

PAUL... . game, bait and switch, or just leaving information out, I know it happens a lot.. I even hear other loan officers and how they talk to people and screen them.  I know one car salesman that made more money they I did in the last 2 years, because he can just sell, even if it's not a good fit for that buyer... I know his personality.. so I think you are correct in your statement. And yes, nothing against all car sales people... but there are some that do mortgages instead and act the same. thanks

PAT... . well, thank you very much for the kind words and for the compliment.. I try..


LENN.... .  most definitely get a copy of what you locked in. The sad part, I have seen loan officers delay the process or if things happen because of the borrower or that it was difficult, they put the blame back on the borrower and don't try to expedite things, to lose that rate lock. I will be talking about this also, in another post. I have seen it happen to borrowers.

In regards to your story, I have seen this happen several times and in some cases, it didn't work out for the borrower. Maybe I need to go back to my post and outline this, thanks to your paper comment. But the borrower signs what's called a float/lock agreement...  if it's blank or marked float, and the borrower doesn't know this, but assumes they are locked, or were made to believe that they were locked... rut row.. the proof is a borrowers signature with the word float checked... another trick that some loan officers have pulled. So thanks for sharing this.. and yes, lucky for that borrower of yours when rates actually went down.


JUDITH... . my pleasure and thanks for the compliment.


Oct 21, 2010 02:54 AM #13
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

This is just another area of mortgages that borrrowers don't really understand.  Yet, it's such an important part of the process and will effect their payment for years.

Oct 21, 2010 05:18 PM #14
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