Mortgage Rate Lock Agreements

by David Iverson from Blaine, Minnesota USA

Ask Kate about Mortgage Rate Lock Agreements, cancellation and expiration policies: Hi Kate, I have two questions for you about my mortgage rate lock agreement. 1. When a lock in agreement expires can the borrower move on to another lender without obligation?


David continues...
2. Can a lock in extension agreement be done on the phone or does it have to be done in writing? Thanks for you help!

Kate Answers: Mortgage Rate Lock Agreement

***zz-portrait-left.shtml*** Dear David,

I personally can't see how a lender has the authority to penalize you for moving to another mortgage company after a rate lock expiration.

After all, isn't the lender relieved of obligation at that point?

But regardless of my opinion, it comes down to what you've signed. Lenders have various policies, each a little different. So read all pages of your paperwork, specifically the mortgage rate lock agreements so you don't end up with unfortunate surprises like this -- Yield Spread Premium SAY WHAT!

Mortgage Rate Lock Extensions

Most lenders will extend an interest rate lock over the phone. But here's the thing. You must get written confirmation. In fact, I already wrote about this very dilemma for borrowers here at How To Lock Over The Phone.

Bottom line? Mortgage applicants deserve to know the lender's terms before they lock in their mortgage rate. The only way to do this is to get all pages of the signed lock in agreements in writing, immediately upon locking over the phone or in person.

Mortgage Rate Lock Unzipped

I know I say it a lot but no one will care about your mortgage as much as you. And locking in interest rates is a good example.

Case in point, take a look at the number of letters from other mortgage borrowers with rate lock problems at Mortgage Rate Lock Unzipped.

And while we are on the subject, here is how to avoid hidden fees when locking mortgage rates.

David, one more thing. I'd like to hear back from you. Let me know if this page was helpful to you. Comment here on Mortgage Rate Lock Agreements.

Or Ask Kate another question here.

Best wishes,


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Expired Lock-In Rate
by: Ruth from Queens, New York

I locked in a mortgage rate which expired due to the lender taking too much time with the refinancing of my home. I have complied with all the requests made by this lender. I have also called and left several phone messages and e-mails, all of which went unanswered.

Initially, a Good Faith Estimate was sent to me as well as the lock-in mortgage rate, but both have already expired. How do I proceed at this point if I can't even get the lender to return my phone calls and let me know the closing date and what the rate will be.

I have heard they are extremely busy with people trying to refinance because of today's lower interest rates. However, that being said, this does not help me whatsoever in moving forward and knowing what to do next.

Hi Ruth, Kate here. I'm sorry to hear about your expired mortgage rate lock, especially since interest rates have been increasing.

Some lenders stall to increase profits. Others are disorganized. No matter what, allowing a rate to expire with no communication on the part of the financial institution is horrific customer service.

If you decide to switch to a new lender, discuss your expectations with the loan originator. Read the terms of the mortgage rate lock-in agreement thoroughly and get signed copies.

However you might want to try getting on the current lender's website to get a supervisor's phone number. You may be able to stir up enough action to save your lock-in rate and close your refinance.

Best wishes, Kate

P.S. Find more Ask Kate solutions at Ask Kate about Locking Mortgage Rates.

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