What You Should Know About Mortgage Rate Locks
October 1, 2003
As mortgage rates begin to rise, so do complaints about "rate locks." If you're in the market for a mortgage or are refinancing your home, please follow these tips:
Get your rate lock commitment in writing. If you choose to lock an interest rate, ensure that the rate lock commitment is in writing and that you retain a copy of the commitment. Ask whether the commitment is from the actual underwriting lender. Do not accept a rate lock commitment from a mortgage broker.
Verify that your rate lock commitment is from the mortgage lender, bank, or credit union. Remember that only mortgage lenders, banks, and credit unions are authorized to issue rate lock commitments. Mortgage brokers are not allowed to issue rate lock commitments. A mortgage broker, however, can obtain/arrange a rate lock in writing from the actual underwriting lender. Ask your mortgage broker to provide you with a copy of the rate lock commitment from the underwriting lender.
Provide all documentation to your lender or broker in a timely fashion. Throughout the mortgage application process, provide all required documentation to your lender or broker in a timely fashion and well before the rate lock expires.
Contact your lender or broker often throughout the mortgage application process. Call your lender or broker regularly during the mortgage application process to verify that the transaction is progressing smoothly.
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