Ditech : Mortgage Refinancing: Lock-in Your Interest Rate

If you are in the process of shopping for a new mortgage loan it is important to understand how mortgage lenders guarantee interest rates. When you find the right mortgage loan you will want to have the interest rate and points locked-in and guaranteed by the mortgage lender. Here is what you need to know about mortgage interest rate guarantees.

When you find the perfect mortgage offer having your interest rate and points locked-in is a way to make sure what you pay does not change before you close on the mortgage. This guarantee is your mortgage lender’s commitment to hold your points and interest rate for a specific period of time. You need to make sure the lender grants you enough time to close on the mortgage before the guarantee expires.

Make sure the lender gives you this guarantee in writing. If there is a fee for the guarantee this fee may not be refundable if you decide not to follow through with the loan. Mortgage lock-in guarantees usually last for a period of time from 30 to 120 days; the longer you can get your mortgage lender to guarantee your interest rate the better. If you are unable to close before the guarantee expires your mortgage lender could give you a less favorable interest rate or require you to pay more points upfront.