A lot of times, borrowers complain about lenders who fail to lock-in mortgage rates and lenders also complain about borrowers misunderstanding the process and think they have a mortgage rate lock and an interest rate when in fact they don’t. Today’s real estate minute interest rates change daily and at times they change hourly that depends on what’s going on in the bond market. You don’t get an interest rate until you officially lock in that rate, but you can’t simply walk into a mortgage broker’s office and ask to lock- in today’s rate.
How to Know if a Rate is Locked
For a mortgage, you actually have to apply for the loan and then you have to pay certain fees in order to secure that interest rate. Now, every lender has to give a borrower certain documentation following a loan application. That’s the good faith estimate and it details all the information about the loan terms, how much you’re going to be paying for it and the rest, and you have to get that in three days. When you go over that documentation, it should show you whether the interest rate in your loan is actually floating or locked. So you got to make sure that you read the documents. One of the things you’re also going to get down the line is a rate lock disclosure and that’s how you know for sure that the mortgage rate is locked and it what interest rate as long as you read the documents and you make sure that all of them are together, you should never have a problem knowing whether or not you have a locked-in a mortgage rate.
Signs it is Time to Lock in Mortgage Rates
Low Interest Rates
In the past ten years, borrowers never complained about locked mortgage rates as interest rates kept drifting lower right as they were going lower, you want to get that lower interest rate. So if a lender forgot to lock you in a rate that was good or if they did, it was because they didn’t want to be locked out of the lower rates, but when interest rates go up, borrowers yell and scream any time they fail to lock in a rate. Even though these days they’re still getting an interest rate that’s historically low, so if you happen to be annoyed missing out and locking a slightly lower interest rate, you have to understand this. You still have a low rate, it’s still a really good rate, and it’s never advisable to try and time the market anyway.
What to do if Rates are Not Locked in
Now, if for some reason, your loan officer lies to you, yes, that happens or fails to lock in your interest rate after you take the proper steps to do, so you probably have a good case to have the mortgage lender honor that rate lock request, you’ll have to deal with a manager or other person at the institution. At that point, and of course you want to make sure that you have all of your written documentation, because if it isn’t written and you didn’t receive a disclosure, it probably didn’t happen. Now if the bank or other institution fails to work with you in an honorable way, to fix the problem caused by their loan officer, you might want to consider filing a complaint with the Consumer Financial Protection Bureau (CFPB).