Interest Rate Lock In

by Ryan
(Minneapolis, Minnesota USA)

Ask Kate about your Interest Rate Lock In Agreement: Hi Kate, My partner and I are buying our first home. We are going through through a credit union. The loan officer has only closed on 3 homes so far and is fairly new to all of this.

Ryan continues... We locked in an interest rate of 5 percent for 45 days and signed the interest rate lock in agreement. We were supposed to close in a couple of days and got the dreaded call that closing was going to be delayed because they adjusted our mortgage rate. (Note from Kate: adjusted?!)

It went from 5 percent to 5.75 percent.

We were a little confused since we were locked into an agreement that expired a few days after the time we were supposed to close. Well the next day the loan officer called us and advised us that there is a federal adjustment to the rate now putting us at 6.75 percent!!

We got this news in a matter of 24 hours! IT MAKES NO SENSE!

I have read and reread the interest rate lock in agreement and nowhere does it state that they can change the rate on us during underwriting. What it does say, is that it is that under no circumstances can they change the mortgage rate without a written agreement from us. Which we did not do.

Our Realtor is furious and VERY confused at what is going on. I forwarded the interest rate lock in agreement and she states that we would have a lawsuit if we wanted to pursue it. I JUST WANT TO CLOSE ON MY HOME!! I really don’t care that the rate went up, because I know that we can refinance the mortgage.

I am getting the runaround with all of this and would like to know my rights. I live in Minnesota and don’t know all the laws but this document states it clearly that the rate should not have changed. PLEASE HELP!

Kate Answers: Your Interest Rate Lock In

Dear Ryan, Dig out your ladder. You are going to be climbing.

Here is your homework. (Ugh, that's a small pun.)

What we can assume? Because the credit union's loan officer is green, he or she does not know how to communicate what went awry with your interest rate lock in agreement.

Or is the loan officer afraid to tell you the rate was miscalculated? Regardless, you deserve answers!

So now is the time to climb your ladder. Ask for the name and contact information of the loan officer's supervisor.

From here on, every conversation is going to be followed by an email putting the details in writing. Include names, phone numbers, email addresses, dates and subject matter.

If after a reasonable amount of time you are not making progress, ask for the next person with authority over interest rate lock in agreements. And the next. And the next.

Believe me, you stand the chance of several layers of command even in a medium size corporation.

I hear from mortgage applicants about interest rate lock in issues more than you can imagine. Read their letters followed by my answers at Ask Kate About Mortgage Rate Locks.

I have also included my guide to locking your mortgage rate at the bottom of this page including the popular article Nitty Gritty Mortgage Interest Rate Lock.

One more thing. I am happy to hear you have the support of your Realtor. And of course, Ryan, it goes without saying for legal advice, consult an attorney.

Best Wishes,

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Finding The Help You Need For Locking Rates

My Interest Rate Lock Guarantee - Help for timing your rate lock.

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All about getting mortgage broker fees in writing - Otherwise your rate lock is meaningless!

How good is a mortgage interest rate lock guarantee? In the end, you have to read your lender's paperwork.

Because Yield Spread Premium is a common reason for losing your rate lock, here is the insider scoop on this odd sounding term.

Questions to Ask BEFORE You Lock

Ask Kate about locking - Ask a question and get an answer from Kate.

Search Readers' questions and Kate's answers at Mortgage Rate Lock Center

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