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Old 06-09-2009, 09:40 PM
 
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I close on my first house on July 3rd. In order to protect myself against the interest rate surge, I locked in the rate with my loan broker today for a loan I just filled out the application for on Saturday. Now I have a "will not exceed point". My question, if & when the rates turn, how close to my close date can I pull in another lender? Should I just pull in one now & start the application process with them to have a best and worst case option? I've read elsewhere that by pulling in a competitor, you can have lenders remove locks to give you the better rate. Has anyone actually had this happen?
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Old 06-09-2009, 11:39 PM
 
Location: Sacramento
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You can get pre-approved by as many lenders as you want. To apply you would have to pay application fee for appraisals and such. I've never heard of anyone doing that with more that one lender. I am curious to know if anyone has done that.
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Old 06-10-2009, 07:37 AM
 
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Quote:
Originally Posted by catcha View Post
I close on my first house on July 3rd. In order to protect myself against the interest rate surge, I locked in the rate with my loan broker today for a loan I just filled out the application for on Saturday. Now I have a "will not exceed point". My question, if & when the rates turn, how close to my close date can I pull in another lender? Should I just pull in one now & start the application process with them to have a best and worst case option? I've read elsewhere that by pulling in a competitor, you can have lenders remove locks to give you the better rate. Has anyone actually had this happen?
30 days. guess it's all ready too late. I am sure you locked at an attractive rate.

Locking should not be considered a one way street. You want to be protected but don't mind screwing the original broker over if rates retreat?
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Old 06-10-2009, 07:58 AM
 
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Originally Posted by TimtheGuy View Post
30 days. guess it's all ready too late. I am sure you locked at an attractive rate.

Locking should not be considered a one way street. You want to be protected but don't mind screwing the original broker over if rates retreat?

Not in the least bit. I guess the same way they don't mind screwing ME over if they don't offer a floating lock, and the rates retreat. They are in it for the business, not the friendship, just like I am. I'm assuming by your response you are a Mortgage broker or in the business. Do you have anything that supports your "30 days"? I have friends that have closed on a home in just over 2 weeks, so I am pretty sure that is incorrect.
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Old 06-10-2009, 09:19 AM
 
Location: Sacramento
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In the old days you could close in a week. But now they probably take more time to look at everything.
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Old 06-10-2009, 12:32 PM
 
Location: Wake Forest, NC
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Originally Posted by catcha View Post
Not in the least bit. I guess the same way they don't mind screwing ME over if they don't offer a floating lock, and the rates retreat. They are in it for the business, not the friendship, just like I am. I'm assuming by your response you are a Mortgage broker or in the business. Do you have anything that supports your "30 days"? I have friends that have closed on a home in just over 2 weeks, so I am pretty sure that is incorrect.

There is no such thing as a floating lock- either its floating and susceptible to the market or its locked. Float down/ renegotiation is available with some lenders and this may be what your are calling a floating lock. There is no reason for your LO not to do this because they can maintain their profit margin and deliver a lower rate to you which should inspire you to refer associates to them for a purchase or refinance loans in the future. Believe it or not this is the goal of professional LO's- to exceed your expectatons and earn your refferral- not pay for their kids college on your loan. By the way which you can't do.
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Old 06-11-2009, 07:42 AM
 
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I'll go ahead and post what I have learned for anyone who stumbles on this thread looking for the same answers. The most frustrating thing throughout this whole process is; it is easy to get your questions answered, finding someone without a hidden agenda that actually knows the answers is nearly impossible, as TimtheGuy was quick to demonstrate above.

The LO that I originally selected was a broker, meaning he represents several lenders, however typically their underwriting is done out of house, and can take up to 3 weeks. They will select one of their lenders that best suits you at the beginning and only start the approval with them. This means if the rates change after they lock, they don't usually don't have time to switch you over to another one of their lenders mid stream. So, it is up to that lender to "unlock" you, which they really don't have any motivation to do. I have talked to several other LO's that actually represent one lender, and since everything is done in their office, they can turn an approval in a week, and they had no problem picking me up at this point in the game. I was also given the same lock rate (with no points) even though the market has already moved up quite a bit since then. I also informed them of my situation, so this lock is what I call a "floating" lock, if the market moves .25% or greater below where I locked, they will let me lock in at that new rate. The only money I will be out if I switch is the upfront money I paid to the other lender for the application fee (in my case nothing). You may also have to order another appraisal with the new lender, due to the home valuation code of conduct, apparently there is a new way that appraisals must be ordered and some lenders do not allow an appraisal ordered by one bank to be transferred to them. (In my case they accepted the old one).

Now, I am going through the approval process with two competing lenders. Since they both pulled my credit in a 14 day time period, I only get a hit for one inquiry to my credit (http://www.myfico.com/CreditEducatio...Inquiries.aspx), I am guaranteed I won't lose money if the rates continue to rise, if they fall I will be in better shape. Hopes that helps someone. Victor Burek, who writes this very insightful post to the current mortgage rate conditions: http://www.mortgagenewsdaily.com/consumer_rates/ was very helpful as I tried to determine what to do.
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Old 06-11-2009, 10:07 AM
 
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So your first broker is left holding the bag. He now has a lock that will be added to his 'fall-out' count. fyi-that is a mark against him with that particular lender. He may also have to cover the cost of your credit report and automated underwriting charge out of his own pocket. Not to mention he won't get paid a dime for the time he has into your file.

But hey, you have your new lock (AT THE SAME RATE) with your new lender.

fyi #2-I am not a broker with these issues. Just wanted to point them out.

Last edited by TimtheGuy; 06-11-2009 at 10:31 AM..
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Old 06-11-2009, 10:11 AM
 
Location: Sacramento
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Quote:
Originally Posted by TimtheGuy View Post
So your first broker is left holding the bag. He now has a lock that will be added to his 'fall-out' count. fyi-that is a mark against him with that particular lender. He may also have to cover the cost of your credit report and automated underwriting charge out of his own pocket. Not to mention he won't get paid a dime for the time he has into your file.

But hey, you have your new lock (AT THE SAME RATE) with your new lender.
That is part of the business they chose to go into. Every business has its pitfalls. Merchants for example have to deal with shoplifting.
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Old 06-11-2009, 10:29 AM
 
4,963 posts, read 12,556,924 times
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Originally Posted by suzie02 View Post
That is part of the business they chose to go into. Every business has its pitfalls. Merchants for example have to deal with shoplifting.
Yep. Do we get to consider shoplifters scumbags, or do we just say "hey the shoplifters need to look out for their best interests" and "it is just the cost of doing business" to the merchant.

Like shoplifting, the more borrowers that stick the broker with costs out of their pocket, the more they will have to charge the next guy.
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