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M, Home Buyer in Alexandria, VA

When do you lock in interest rate - before or after you have a ratified contract? I have been told you can do

Asked by M, Alexandria, VA Wed Jul 9, 2008

that before you find a property - how much does it cost to lock it?

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M,
It is NOT a good idea to lock in the rate until you have a signed and executed contract to give a copy to your Mortgage Broker. Here's why, Lock times vary from 12 days to 60 days. The longer the time frame, the higher the rate. Once you lock in the rate, the clock is now ticking on a time frame to close within the time frame the mortgage broker chose for you. You must give your broker and lender ample amount of time to do their work, but their work can not even start until the broker receives the contract.
If you don't close during the chosen time frame, you will be assessed a penalty charge which can cost you unnessesary dollars. So it is much wiser to get the contract signed and executed first so time doesn't eat up your loan processing term to get your loan closed.
0 votes Thank Flag Link Tue Jul 15, 2008
To: Alex. Homebuyer
From: Victoria Lewis(Branch Manager-Jacob Dean Mortgage)
Here is My WEBSITE:TheCannaeGroup.com
0 votes Thank Flag Link Tue Jul 15, 2008
Dear Homebuyer in Alex., Va.
From: Victoria Lewis(Branch Manager-Jacob Dean Mortgage)
It is usually Much Chepaer to "Lock in the Rate" after a ratified Contract. This is the Standard Rule by Most Lenders especially in the Tri-State Area. I Have Over 3 & 1 Half Years of F/T Retail Mortgage Experience. Kindly Give Me a Call. I also have Several Realtor Connections all Over especially in Alex., since this is My Territory. Although I Live in Dumfries Off U.S. Rte. 1(Jeff. Davis Hwy.), My Office is at The King Street Station in Alex., Va. across from the KING STREET SUBWAY METRO-BLUE LINE. Check Out My Trulia Profile & My Website. Kindly do Give Me a Call. My CELL is 571-521-9156. Here at Jacob Dean, We do Loans in 26 States in the USA!!! We do Residential/Commercial/Hard Money. I also Offer CONV/FHA/VA, etc. I also Have "Rapid ReScore" as well. I Have Wonderful Programs that can really Put You into that House just a little bit Faster!!! Give Me a Call. I Really Want Your Business. Take Care.
0 votes Thank Flag Link Tue Jul 15, 2008
99% of lenders will not lock in the rate prior to a ratified contract. The 1% that do will charge you money upfront as "points" and you have a set time period from the day you lock to actually close on a property (typically 60 to 90 days). The cost is typically anywhere from 1/8 to 3/8 of a point.

Based on the current interest rate behavior, the cost of such an option is not worth the money and stress. If you don't settle on a property prior to the lock expiring, you lose the upfron money you paid and will have to pay the current interest rate anyway. Imagine the stress of being forced to buy a house by ____ or you'd lose that money.

I just had a buyer client consider the same option with Suntrust Mortgage. Be glad to go into more detail with you offline if you'd like.
Web Reference: http://www.LoudounScene.com
0 votes Thank Flag Link Thu Jul 10, 2008
Hi M, not too many lenders will lock prior to establishing a property to purchase. You don't want to pay extra fees or costs associated with a longer lock if you don't have to. You also must be weary of any contract stipulations the seller may have on when they want to close - could be in 15 days, 30 days, 45 days or 60 days. As far as costs go, it depends on the length of lock (longer the more expensive), and the lenders fees. Let me know if I can be of further assistance.

Thanks!
0 votes Thank Flag Link Thu Jul 10, 2008
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