Quick reminder to lock in your mortgage

On the first Friday of every month, the Jobs Report comes out.   Tomorrow is the big day.    As I’ve written about this topic before, this economic indicator tends to have a huge impact on mortgage interest rates.  

It is the consumers choice to float or lock a mortgage interest rate.   My preference is generally always to lock.   Especially during these historic times in the mortgage industry.   Locking in a mortgage interest rate not only secures that rate for your loan, it may also preserve that mortgage program.     With some lenders pulling back on certain programs, a few of them are honoring the loans that are locked and underwritten.  

Please do not assume that your mortgage rate is locked.   Make sure you have a written lock confirmation (a Good Faith Estimate is not a lock confirmation).   If you have a mortgage in process, you may want to contact your Mortgage Professional to confirm it is locked and what their read is on the current situation.  

It pays to be extra cautious right now.  

18 thoughts on “Quick reminder to lock in your mortgage

  1. Get a written lock agreement? You can say that again! I have had clients who got ripped off because the loan officer told them they were locked, but when we got to closing the numbers were bigger than what the clients were expecting. We called the loan officer and he says “Oh, I don’t think you were locked. Do you have any documentation for that?”

    There was a lot of yelling and screaming, and the lender waived a few fees just to get it closed, but the buyers still got hosed.

  2. That bites! Sometimes I’ll talk to borrowers who believe they are locked because they have a good faith estimate or they’re literally “floating” along the transaction and signing preliminary loan papers that have interest rates on them…not understanding that they are not locked.

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  4. The Wall Street Journal is reporting that Countrywide will lay off an additional 12,000 employees. This figure and many of those in the mortgage profession (10s of thousands) have not been figured into the figures that were published in the Jobs Report today.

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  6. So I locked in my mortgage Wednesday of this week. I have great credit, and this is an investment property — my first. I got a rate of 6.625% paying a fraction of a point (0.125%). And my closing costs are low — this I know for sure.

    But after reading that people are getting rates around 6.0%, I’m wondering if I got screwed. But maybe it’s because I’m buying an investment property that it’s that much higher?

    Someone tell me that I did good. Or that I didn’t. I just need to know so that I’m wiser next time around.

  7. Hank, what is your loan to value? What type of property is it? Is it a 30 year fixed?

    Investment property has a much different interest rate than owner occupied. I’ll check this out for you if you can answer my questions above. 🙂

  8. Hank,
    One question I forgot to ask was when are you closing (how long is your lock). I’m going to assume closing in 30 days.

    A non-owner occupied at 80% has a 1.5-2% hit to fee (as compared to own. occ). If your loan was locked on Wednesday at 6.625% with low closing costs (true costs priced into the rate) and a orig./discount of 0.125%; that’s sounds like a screaming deal (actually sounds too good to be true).

    Rates are better today than Wednesday and 6.625% at 0.125% with low cost is still pretty incredible for a NOO 30 year.

    Can you fax your GFE to me at 206-202-8212 or email it? I’m wondering if there’s a prepayment penalty on your mortgage.

    NOOs have higher closing costs. The appraisal can be around $700 vs. $400 for own. occ. It’s possible that the AUS will reduce the type of the appraisal required depending on how qualified the buyer is.

    Again, Hank. I would love to review your GFE for you (at no obligation to you).

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