Can My Mortgage Interest Rate Be Locked Without My Consent
by Pat from Belhaven, North Carolina, USA
Can my mortgage interest rate be locked without my consent? Hi Kate, My loan officer says he locked my interest rate because rates were rising. I only found out after a new good faith estimate (GFE) was issued by the lender.
They also changed the GFE to include a prepayment penalty, which they say is credited to my mortgage closing costs. The loan officer says the prepayment penalty is only for the first year?
The interest rate that he locked raised my monthly house payments by $40. Is it legal to lock my mortgage interest rate without asking me?
Kate Answers: Can My Mortgage Interest Rate Be Locked Without My Consent
Dear Pat, Good question!
Locking interest rates is at the heart of every mortgage transaction.
But how does a homeowner take charge of getting a mortgage that mirrors the interest rate and mortgage closing costs
of the good faith estimate? They Get Their Mortgage Rate Lock Terms In Writing
Since this is my mantra on this website, I am going to assume you did. If you didn't, make that the last time you depend on verbal mortgage agreements.
Who Has Authority To Lock Your Interest Rates?
Now back to the matter of your interest rate being locked
without your permission.
Although banks and mortgage companies issue required disclosures, they can vary from state to state. So go back to your written mortgage rate lock agreement, looking for a provision giving authority to your loan officer to lock your interest rate without your consent.
Regardless, I would still ask these questions.
- Why wasn't I called before my interest rate was locked?
- Where can I verify that mortgage rates were increasing on the day I was locked?
- Who chose to impose a prepayment penalty on my mortgage?
- Why wasn't I given options for no prepayment penalty?
- Where is the guarantee in writing that the prepayment penalty is for only one year?
- Were my closing costs credited the entire rebate from the prepayment penalty?
- Where is my written confirmation of mortgage rate lock terms?
No suitable answers still? Like I always say, start up the ladder, rung by rung, supervisor by supervisor, until you are satisfied that your questions are being answered.
While mortgage rate lock problems are still front and center to a loan process (see Ask Kate Mortgage Rate Lock questions & answers
), much heartache, time, money and hassle can be avoided by asking crucial lock-in questions upfront
and expecting all answers to be put in writing.
Pat, one more thing. I'd like to hear back from you. Let me know if this page is helpful to you. Comment on Can My Mortgage Interest Rate Be Locked Without My Consent
. Or Ask Kate another question here
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