Home Buying in Boston>Question Details

andy jones, Home Buyer in Boston, MA

Got preapproval letter but it doesn't mention anything about the actual mortgage product. At what point do i get a rate locked in?

Asked by andy jones, Boston, MA Thu Nov 7, 2013

Im worried I'll have to pay the appraisal and other costs only to find that my rate is not satisfactory

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The pre-approval is just the first step and does not mean you have to move forward with that particular lender unless they offer you the rate and terms that you are most comfortable with once you have an accepted offer in hand. The rate can always be locked before you move forward with a particular lender, unless the purchase date is too far out. Although that is not ususal in most cases.
Most likely the type of loan will be based on the home you move forward on buying and some of the details may change if you do not have 20% to put down. In that case you will need Mortgage Insurance or a second loan to cover the difference between your percentage down and and the 80% loan amount. There are many different types of loans out there, and it is surprising that the loan officer did not discuss what type of loan is best for you and your purchasing goal, such as a 3% down Mass housing loan or a 3.5% down FHA loan. Of course if you are planning to put 20% down then the loan officer is most likely going to qualify you for a conventional fixed loan unless you state you are looking to do something else, which becomes more important when there is an actual property to move forward with.
It is best to have a detailed discussion with your loan officer of choice before commiting to that person and company. You should feel comfortable asking any questions to ensure you understand the process before paying the Application/Appraisal fee. A good loan officer is happy to spend the time needed with each and every borrower explaining different programs and when the rate can be locked, along with anyhting else that is a concern for you as the borrower.
I specialize in helping first-time home buyers navigate through the loan process and welcome the opportunity to have a discussion with anyone hoping to make a home purchase in the future:
Kristine Guindon
Loan Originator
NMLS# 314976
Poli Mortgage Group
Mobile: 508-509-0050
kristineg22@gmail.com
Apply Online/Request a Rate Quote: http://www.polimortgage.com/kristineguindon
0 votes Thank Flag Link Thu Dec 26, 2013
Time to chat with your mortgage broker - you can always change lenders if they don't get you the information that you are looking for. A good broker will take the time to explain it all to you.
0 votes Thank Flag Link Mon Nov 25, 2013
Yes, Please talk with your lender to discuss what mortgage priduct you actually qualify for. Also, please not that a rate can not be locked in until you have actually recevied a commitment letter from your lender. Prior to that , you are only receiving a CLOSE estimation on what your rate will be.
0 votes Thank Flag Link Thu Nov 21, 2013
Andy,

I, too, suggest having an open discussion with your lender. It’s imperative that you iron out these details once you have an accepted offer.

If you do not currently have counsel to assist you in the Purchase and Sale negotiation, feel free to contact me at the number below. I can walk you through the post-offer process so you know exactly what to expect moving forward.

Good luck!

Liz Barletta

Elizabeth Perez Barletta, Esq.
Sassoon & Cymrot, LLP
84 State Street, 8th floor
Boston, MA 02109
ebarletta@sassooncymrot.com
p: (617) 720-0099 x:110
f: (617) 720-0366
0 votes Thank Flag Link Wed Nov 13, 2013
I would contact your local lending professional to help with this answer.
If your current lender didn't explain this to you, I'd find another.

I know this guy can be helpful: rtranchell@totalmortgage.com
Bob Tranchell Total Mortgage Services LLC (508) 367-5731 cell


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0 votes Thank Flag Link Tue Nov 12, 2013
Dear Andy,

If are paying for an appraisal and you want the rate quoted to be a guaranteed rate, you cask the bank to provide you with a Rate Lock commitment, that will show you what rate you are getting and the cost to get that rate, also, you should consider the timeframe for which the lock is guaranteed for… you don’t want to get a 30 days rate lock if the closing is not happening in 45 days… Also, you should consider the what if scenarios if the closing does not take place before the lock expiration, how much does it cost to extend and who will pay for that… Best of Luck!!
0 votes Thank Flag Link Fri Nov 8, 2013
Hi Andy,

Congratulations on your preapproval. My concern from your question is that you have questions that your lender has not answered for you. I would suggest that you call your lender and make sure they take the time with you to answer any questions that you may have. If you are not receiving five star service, I would recommend that you get a second opinion from a local loan officer.
The most important thing when looking for the right loan officer, is finding someone who is willing to take time with you and answer all your questions.

Good Luck with the home buying process!
0 votes Thank Flag Link Fri Nov 8, 2013
I bet the problem is deeper than you think. Did you actually sit down with the loan officer and go over everything, including your support documents, like tax returns, pay stubs, etc.? Loan officers sell money, yes we do, so we try to make it as easy as possible. If the LO didn’t require you to furnish ALL of the documents an underwriter MUST review before the loan can close then I wonder if you qualify at all? Based on my fall out ratio due to my client’s buyer not making it to the closing table because the LO issued a preapproval letter without support documents, I estimate that 30% of the preapproval letters out there are not valid. NAR’s reports appear to support my theory.

If the LO will not take the time to review everything with you then move on, find someone that will.

Millions of dollars are wasted every month due to appraisals, home inspections, forfeited good faith deposits, time, etc. Good luck,

Jim Simms
NMLS # 6395
JSimms@cmcloans.com
Financing Kentucky One Home at a Time
I answer questions about financing real estate based on my decades of experience dealing with mortgage underwriters. This answer is my personal opinion, has not been reviewed or approved by the company I work for. I do not offer legal or tax advice, if you need answers from an attorney or CPA find one knowledgeable in your local market.
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Fri Nov 8, 2013
Rates are quoted prior to finding a property, but once you have a Purchase and Sales agreement in place THEN you can lock a rate. Rates are locked off of properties, not borrowers.... if that makes sense.

That being said, I have a unique program that allows you to LOCK and then SHOP. Once you are pre-approved, we can lock in a rate and you have 30 days to find a property. In a rate environment where rates are climbing, this program is very popular and protects against rate increases. if you need more info, please let me know... I' would be glad to help.

Scott McCauley, (NMLS# 174108)
Mortgage Planner
Regency Mortgage Corp., (NMLS# 1938)
40 Congress St, 3Rd Floor
Portsmouth, NH 03801
Office: 603-610-8852
SMcCauley@RegencyMTG.com
http://www.LendWithScott.com
0 votes Thank Flag Link Fri Nov 8, 2013
Andy, you should know what loan program you're pre-approved for and all the aspects of that loan program. The rate is locked once you find a property and begin the loan process.

Consider speaking with your Loan Officer and ask him or her to explain all the details of your pre-approval to you.

If my response was helpful, consider clicking BEST ANSWER!

Javier Meneses
Senior Loan Officer
NMLS #23130
STERLING NATIONAL BANK
310 Crossways Park Drive
Woodbury, NY 11797
jmeneses@snb.com
(516) 606-9648 Cell
(516) 740-4478 Office
(516) 918-5383 Fax
0 votes Thank Flag Link Fri Nov 8, 2013
Generally when you get interested in a particular property you should start discussing details.
You still should call you LOan Officer and ask what rate and program was used to qualify. You should also be provided a fee cost worksheet to know about what amount will be needed for closing costs.
You may lock in once an offer is accepted so this can change depending how long you search takes.
0 votes Thank Flag Link Fri Nov 8, 2013
You can discuss that with your mortgage person in advance. Depending on your credit score and income your lender can give you a good idea of what your rate would be at this moment in time. But in reality it all comes down to when you identify the property and and P&S is signed. Let me know if you want I can discuss more in details via my direct phone or email. I can also help guide you through the whole process as your buyers agent and ensure you know the process from beginning to end.
0 votes Thank Flag Link Thu Nov 7, 2013
Hi Andy,

First of all, congratulations on taking the first step towards buying a home. With your pre-approval letter in hand, you'll be ready to go when the time comes to submit your offer.

Once your offer is accepted, you'll get the chance to lock in a rate that's agreeable to you. Best thing to do now is to discuss the next stages of your financing with your lender. I'm certain she or he would be happy to answer all your questions.

Good luck.

Michael A. Pallares
0 votes Thank Flag Link Thu Nov 7, 2013
A preapproval letter is just the beginning of the mortgage process. It just means u qualify somehow.
You will need to move to the next step after an accepted offer and the inspection issues cleared to get a real rate.
0 votes Thank Flag Link Thu Nov 7, 2013
When you actually put money down to lock the rate. But there is usually a time frame on the lock, so unless you have a property in play, one doesn't usually lock the rate.
0 votes Thank Flag Link Thu Nov 7, 2013
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