MortgagesUndressed

Click here for the article where I said to lock, and why.

OK, so you locked your rate, all is well, right? Right? Of course I might have been wrong, then what? We will deal with that on line as the days go forward. I was challenged as wrong on Teresa Boardmans blog, so I challenged back. i put up a rate that is easy to compare. I picked a date of closing. My hope is I am right, but my real hope is to make this a learning experience. To see the particulars, click here and you will go to http://mortgagesundressed.com/2006/11/28/lock-your-interest-rate-now/

So let us assume you locked your rate and that that was a smart move. All is well then, right?

Maybe not. Does your loan officer gamble with rates, many - too many do. If they can pick up an extra 1/4 point in rebates because you thought you were locked but they played the market it could mean several hundred dollars more to them. How do you know if they gambled with your lock? Most of the time you don’t know. Unless of couse they get you to closing and rates went way up. You might find out then.

Let’s say they didn’t gamble with your lock. So all is well, right? Maybe not. Will the loan close on time? Maybe you picked a so so or a no no lender. They have a lot to do, will they be judicial in getting it done? if the loan isn’t completed to the underwriters requirements the loan may not fund on time. If rates have gone up, you might lose your rate, even if you were locked. Oh dear.

Lets say however, your loan officer is good but a little busy, you had to get a copy of your bankruptcy for the underwriter review. He asked you for it, but you put it off. Now you can’t find it. Everyone discovers this at the last minute. The only hope you have is to rush down to Superior Court for a copy. But you can’t get off work. Will the underwriter cut you some slack? No. If all you are required to deliver for review is not provided, you can lose your lock, lose your rate, and it just might be your fault.

Oh dear, this is so complicated, so disconcerting. What do I do you might ask? OK here is my best advice: Make sure you have in your immediate possession a copy of a lock document where your loan officer puts in writing the terms of your lock. He must do this, but if playing games might put it off. Don’t stand for that. Next know what is required by underwriting. Know who is responsible for each condition. Those you must do, do them now. Verify they were received. Keep a copy in case they get lost. Those your loan officer is to do, check up in 10 days, see if the loan is ready for the documents to be produced. If not press to know why. Be a pest.

Lastly, hope rates go down. If the go down I have to explain how to deal with this: either with the bank, or with your own emotions. Time will tell. Larry Cragun

PS: I love this business.