The Real Estate Encyclopedia
How Long Are Mortgage Rate Quotes Valid?
Category - Home Buying Questions - General Home Buying FAQ's

When you apply for a loan you have the option to “lock in” the rate.  Locking in the rate is advisable when there is an expectation in the market that rates may be increased.  Make sure the rate lock is valid until or past the closing. 

 

You should be able to lock in a rate anytime you find a property, and up to 5 days before the closing. Rate locks are good for a certain length of time, which could be anywhere from 7 days to several months. If closing does not occur within that time, the rate lock expires and is no longer valid. Ask your lender for an estimate of how long it will take to process your loan and get the rate lock in writing.  Also, ask your lender whether you can back out of a rate lock, if the interest rates drop.  Most lenders will grant you the lower rate but you must have this commitment in writing.

 

Any rate lock should be in the form of a legally binding document. This may be in the form of a lock-in form that accompanies a "letter of commitment" or "loan-commitment letter," or it may be on the letter of commitment itself. The lock-in document should include both your name and the name of the lender, the amount to be loaned, the interest rate, points, and any lock-in fees. The letter should also indicate the date the lock was initiated and the date the lock expires (or the number of days for which the lock is valid).  Make sure you read the document and understand it. 

 
Category(s)
Mortgage Questions - Mortgage Loans FAQ's
Home Buying Questions - General Home Buying FAQ's
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