Real Estate Tips from Bob Rich-Locking in Rates

When considering various loan programs, it’s important to understand that lender’s quoted rates do not necessarily reflect a firm commitment to provide a loan at a given rate and terms.
Lenders typically have three lock-in policies. In some cases, loans are locked in at the time of application and the rate and terms quoted are the rate and terms you’ll receive. Other lenders only lock in rates once applications have been approved. If it takes four weeks to review a loan application, then the rates and terms in place a month later—whether higher or lower—are yours. A third approach is no lock-in. Your rate and terms are determined at the time of settlement, an approach that offers no security at all.
Anyone looking for a home loan should ask about lock-in policies, not only interest rates, but whether points and all other terms are locked in as well. If rates are guaranteed but not points, it’s then possible that rates will remain unchanged but points will rise.

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