Home Buying in Massachusetts>Question Details

Jgmacarthy, Home Buyer in Massachusetts

When should I start getting GFEs?

Asked by Jgmacarthy, Massachusetts Fri Jan 29, 2010

I recently got my offer approved for a home. We are set to sign the P & S by February 16th and close on March 25th. I am wondering if it is smart to start looking for a loan now and get GFE's, or if I should wait until around 30 days before closing. My main concern is getting GFEs now and having the rate lock expire before closing, as I see most locks are for 30 days. I am not interested in paying extra for an extended lock and would rather just time this right.

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Hello Jg- If I were you, you should lock in a rate right after you sign the P&S- or actually until the P&S is signed by both parties, etc. Then you maybe lock in a rate for 45 days. Typically, you can lock in a rate for 30,, 45, or 60 days. The longer you lock in, the more expensive it is.
However, if rates go up- which they likely will- then you know you have your (lower) rate locked and all set.
I usually recommend a 45 day rate lock at outset for any home purchase.
We have many offices in Mass, and I'd be happy to talk with you further if you'd like.
Thanks, and good luck,

Ken L.
0 votes Thank Flag Link Sun Jan 31, 2010
You may not get a loan officer to give you the type of GFE that we used to due to new regulations that were put into effect as of January 1, 2010. This form of GFE was put in place with the thought that everything would be simplified, however what it has done is make things more confusing because certain charges are lumped together, so the borrower can no longer see what they are paying for. What causes the most confusion is the differences in what goes on with lending at the state level. While here in NY, as well as in certain areas of Massachusetts, bank attorneys close the loan, in other areas the title/escrow company takes care of everything. You can and should have someone give you an idea of what your closing costs might be, so that you are prepared. Many loan officers prefer to quote a 60 day rate lock because it is more realistic, and you do not run the risk of having your rate lock expire, or having to pay extension fees. Although it is true that a 30 day rate lock today would most likely not be at the same rate as a 60 day lock, you have no way of guaranteeing that this will be the rate 30 days from now. Let's say today you can get a 30 day lock at 4.875%, but a 60 day lock would be at 5%. The only way that you would be able to lock that 4.875% in 30 days from now, for 30 days, is if rates stay absolutely flat. That is a gamble because it is entirely possible that in 30 days the best rate you will get for a 30 day rate lock is 5.125%. Wouldn't you be annoyed then? Like Steve said, most loan officers try to keep an eye on where rates are every day, after all, this is our job. If you choose to allow your rate to float, you can do that, and start the application process so that everything is completed in 60 days. Your loan officer can watch the market and be able to see if rates seem to be trending down or up, and help you decide whether you should continue to float, or lock something in now for the time you need.
0 votes Thank Flag Link Sat Jan 30, 2010
You should definitely get the loan process started right away. You will have a financing commitment date in the P&S in which you need to show the Seller that you are Approved by a lender. Your approval with be good for 90 days. Once you complete an application with your lender, a GFE will be issued. That does not mean that your rate is locked, unless you request them to lock. Rates are expected to rise as the Fed stops its stimulus of buying mortgage backed securities at the end of March. This being a concern, an extended lock may be wise. A good mortgage banker (like myself) keeps an eye on the market and economic news that will influence rates moving up or down. I am located just outside of Boston, and represent a national FDIC mortgage lender. Feel free to contact me at steve@savvyborrowers.com and I can then provide you with my phone# and company info. If you would like to set up a time to sit down and go over your options, we can do that as well. I have been representing homebuyers for over the past 10 years helping them obtain the most competitive mortgage programs and rates. I work hand-in-hand with you and your Realtor to make the homebuying process simple and stress-free. Let me know if I can help.
0 votes Thank Flag Link Sat Jan 30, 2010
Good faith estimates and rate locks are not the same thing and as such you can get a GFE without a rate lock. It is a GREAT idea to get a GFE at this stage as it will help you prepare for your closing costs. As far as waiting until 30 days of the close date, that is up to you. A lot of reports say that the fed has no where to go with the rates but up... it may be worth locking a low rate now and paying to have it extended... depending on the size of your loan your mortgage person may even eat the cost of the extension... discuss this with her/him up front.
Web Reference: http://www.dreamtown.com
0 votes Thank Flag Link Fri Jan 29, 2010
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