Can Mortgage Brokers Lock in My Mortgage Rate
by Mary W from Chesapeake,VA
Ask Kate if mortgage brokers can lock in a mortgage rate: Can a mortgage broker lock in an interest rate? I didn't realize that I was dealing with a broker until I received preliminary papers to electronically sign. She stated that my rate has increased over a two day period. So I asked her if she could lock it in.
She stated that she would keep an eye on the rate until I close. I then asked her if she was a broker and she stated yes. But I am afraid that the interest rate could soar and then I wouldn't be able to refi at all.
She also told me to call all of my creditors and tell them to close my accounts.
Should I go with a direct lender? Am I liable for signing her preliminary papers? I am not educated with this process. Please I would appreciate your advice.
Kate Answers: Can Mortgage Brokers Lock in My Mortgage Rate
Let's see if I can answer your immediate questions.
I'll also be directing you to other pages on my website. So follow the blue underlined links for more help.
First of all, yes a mortgage broker can and should lock your mortgage rate with the lender. But you need to keep an eye on rates yourself.
I'm not saying you can't trust a loan originator.
But no one is going to care more about your mortgage than you.
And only you, not the broker, not the lender, will be responsible for the next 30 years to make your house payments.
So don't pass the responsibility of monitoring rates and deciding when to lock to someone else.
This means you will need to understand the lock process and get a feel for current mortgage rates and trends. (More on this in a moment.)
3 Reasons for You to Compare Mortgage Lenders
Based on your letter, I recommend comparing a few more lenders. I say this because...
- Her broker-status was not clearly disclosed.
- Her response to your request to lock in your interest rate was that she'd keep an eye on it (observing is not a substitute for locking).
- The advice to close all of your credit accounts is questionable.
So again, that's why I suggest interviewing a few more lenders, banks, and mortgage brokers.
Do This Before Interviewing Mortgage Originators and Brokers
What's your first step? Give yourself a crash course on Good Faith Estimates
. The form was overhauled by the Housing and Urban Development (HUD) to help borrowers understand the cost and terms of their mortgage. I walk you through line-by-line and by the time you are done reading it, you will be a pro!
Then learn how to qualify lenders. Deciding on a mortgage broker or a direct lender's loan originator is like filling a job opening. You are the employer and will be interviewing prospective employees. That's why I say, qualify your lender before you ask to be qualified for a loan.
Help for this is found at How to Compare Mortgage Lender Representatives with Ease
Next, read through my mortgage rate lock series
. I purposefully kept the pages short so you can zero in on key concepts, such as getting lock agreements in writing
. This page also addresses cancellation fees.
Lastly, follow Kate's Mortgage Rate Report at my mortgage blog
so you can track weekly changes in mortgage rates as well as upward or downward trends. You will also find more help for comparing mortgage rates and trends
Above all, keep this in mind. If in doubt, lock in your mortgage rate!
Good luck and best wishes,
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