Lowest Mortgage Rate Lock
by Catherine from Wilmington, Delaware USA
Regarding the lowest mortgage rate lock Hi Kate, If my mortgage broker got me an interest rate and then I found out that I could get a better mortgage rate lock elsewhere I would definitely switch. I would switch even if the original broker would be penalized and the rates plummeted.
I really should have done as much research as possible in advance. I should have found out if mortgage rates were expected to fall over the course of the next few weeks or months.
However, if I had done all of my research and rates still fell unexpectedly I can't be faulted for taking advantage of a better interest rate because that interest rate will affect my life for the next 30 years.
It is crucial that I get the best rate possible. It is more important that I worry about my financial security than the broker who is losing out on the deal.
I don't fully understand why this broker would be penalized for this. Would he be penalized through his company?
Regardless, as long as it was legal for me to do so I would switch to the lower interest rate. It is understandable that anyone would. Catherine
Your Lowest Mortgage Rate Lock
Hi Catherine, Thanks for this contribution. Since a mortgage is such a substantial investment, it is certainly understandable every homeowner wants their best mortgage rate.
To answer your question about a broker penalty - Home lenders have various policies for their mortgage representatives that tighten up or conversely become lax depending on economic climates. This can affect how they deal with mortgage rate locks.
Here's an example of penalizing a broker for breaking a mortgage rate lock. A broker locks in a rate but the borrower finds a lower rate elsewhere. The original locked transaction never closes. So the mortgage company penalizes the original broker by taking away the privilege of offering an extended mortgage rate lock
to any future borrowers.
Another thought for anyone thinking of reapplying for a mortgage to get a lower rate. We've all heard the story of a bird in the hand is worth two in the bush.
I saw homeowners so excited over falling rates, they broke their mortgage rate lock to go to another lender. But they did not take into account the new lender might not lock them in immediately, leaving them subject to a volatile market.
Or because of the next lender's credit report, their credit scores fell too low to get the lowest rate.
So be a smart homeowner and watch out for yourself. Shop not only for the LOWEST rate but also for the BEST mortgage rate which could mean keeping the mortgage rate lock
you already have.
I hope you'll come back to contribute again in the future. Of course, all of my information is free. Please invite friends to comment on this page too.
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