Mortgage Rate Lock Advice for First Time Home Buyer

by Rita C from Rowland Heights, CA, USA

Rita, a first time home buyer asks Kate for mortgage rate lock advice: Rita's banker let her down the first day of the loan process. It began when Rita tried to negotiate lower rates and closing costs. The banker agreed but conditioned negotiations upon the future flow of the market! What? How is that a negotiation! A couple of days later, mortgage rates and fees on the written Good Faith Estimate were blamed on the computer! Rita is understandably suspicious!


Rita asks Kate About Locking In Her Mortgage Rate

Hi Kate,

I'm in process of my Chase mortgage loan. My application was submitted on April 6th. I got quoted for 3.25% for a 15 year fixed and tried to negotiate the rate to 3% without buying points.

So I didn't lock the rate in the beginning. But the banker said they can try to offer 3% depending on how the rate flows.

Later I received docs from Chase showing the rate lock at 3% without points for a 45 day lock option. (I have not signed any lock in agreement).

I spoke with Chase to confirm that now they are offering 3% and also asked for something in writing to show Chase will cover all the fees.

I've been told since the docs from Chase are not indicating this information correctly. (The banker said it's just a standard computer generated form so that's why it's not correct).

Today the banker called and said she can send me an email but I need to know if the loan is not closed by May 29th, I will have to buy points to extend time to keep the 3%.

I'm a bit uncomfortable that she's informing me this at this point. I've been prompt on responding any requests, and today she just told me she needs more documents which were never mentioned in the past few weeks when we spoke.

The inspection will be done tomorrow that leaves us two weeks of processing time. She said the turnaround time for inspection is 5 to 7 days so if anything goes wrong, we might not be able to close before May 29th.

I have a feeling they never wanted to offer 3% without point so this is just another way to make me pay for points? Hope I'm wrong.

This is my first time buying a house so I'm very anxious! Is there anything I can do? Please help! Thank you!

Kate Answers: Mortgage Rate Lock Advice for First Time Home Buyer

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Dear Rita,

When a banker says, 'I'll try to offer 3% depending on how the rate flows' you should know that is NOT a negotiation.

Translated, it means your rate is not locked. I'd venture to say, she was merely appeasing you.

Expect Accurate Good Faith Estimates

Secondly, an incorrect Good Faith Estimate is not something to take lightly. The numbers are not incorrect because they are computer generated. Who input the numbers? Why don't they match your verbal quote! You need answers.

But to get to the bottom of this, you need to know the actual mortgage rates, points, and other closing costs on the day you applied for your loan. This will help determine if there's been bait-and-switch.

Expect Reliable Mortgage Rate Lock Parameters

Thirdly, you have a legitimate gripe about the time scenario. It is the mortgage originator's responsibility to allow sufficient time in the length of the lock for a successful close.

I'd go further to say she should include wiggle room for last minute surprises.

It's quite troubling to me that she is springing the need for additional information so late in the process. See where I draw attention to this practice at Beware of the New Kid in Town - Changed Circumstance.

Insist on Written Estimates and Rate Lock Disclosures

But here's the bottom line. Why haven't you received an accurate written Good Faith Estimate? Why did Chase say you were locked if you hadn't been provided with and signed an interest rate lock disclosure?

Call the supervisor of the loan originator to discuss your suspicions. You are committing yourself to pay back a large sum of money. So make sure you are comfortable with the terms of the mortgage! But before you call, read Jay from Atlanta's letter at New Good Faith Estimate Form.

Good luck and best wishes,

Ask Kate


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