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Old 01-31-2010, 12:01 PM
 
302 posts, read 535,928 times
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Would you pay 1% of the loan amount to lock in an interest rate for 60 days?
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Old 01-31-2010, 01:56 PM
 
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Is this for a refinance or a purchase? I personally wouldn't, but that's because the financial institution I work for only charges fees for extended locks.
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Old 01-31-2010, 02:12 PM
 
Location: Sandpoint, Idaho
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Quote:
Originally Posted by jasminescent View Post
Would you pay 1% of the loan amount to lock in an interest rate for 60 days?
Not unless it was an incredible offer, like 4%.

The mortgage rates are low and will stay low for some time.

Paying to lock only makes sense when there is urgency.

S.
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Old 01-31-2010, 02:40 PM
 
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This is for purchasing, and hopefully be in contract within the next 3 months or so. How about 5% for a conforming jumbo loan?
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Old 02-01-2010, 07:43 AM
 
Location: Mount Laurel
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Quote:
Originally Posted by jasminescent View Post
This is for purchasing, and hopefully be in contract within the next 3 months or so. How about 5% for a conforming jumbo loan?
Is this 1% on top of the origination fee? If so, NO.. I wouldn't pay 1% to lock the rate for 60 days.
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Old 02-03-2010, 07:15 AM
 
Location: Wake Forest, NC
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Quote:
Originally Posted by jasminescent View Post
This is for purchasing, and hopefully be in contract within the next 3 months or so. How about 5% for a conforming jumbo loan?

Why would you consider locking a rate for 60 days when you don't have a contract and may not for another 90 days? Run don't walk away from this Loan Officer.

Say you pay the 1% up front fee for what this lender considers a long term rate lock then it takes 90 days to close you will either pay 1% + extension fees for 30 days which will generally run another 1% or so.... this on top of normal fees associated with any real estate transaction.

The rate is only good if you can close within the rate lock period- doesn't matter if it is 2% on a super jumbo- if you can't close in time you can't get the rate and any up front fee is a waste of money.

Keep your money and find a new LO.
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Old 02-03-2010, 08:09 AM
 
67 posts, read 198,872 times
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Quote:
Originally Posted by jasminescent View Post
This is for purchasing, and hopefully be in contract within the next 3 months or so. How about 5% for a conforming jumbo loan?
Oh, you don't even have a ratified contract yet? We don't allow rates to be locked without one! I still wouldn't. . .
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Old 02-04-2010, 09:05 AM
 
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You misunderstand. I'm asking for the future when we are in contract obviously. Yes, it's kinda dumb to lock in a rate when the period will run out before the closing date, and that makes the original question irrelevant, doesn't it?
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Old 02-04-2010, 09:24 AM
 
Location: Wake Forest, NC
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I did misunderstand your question originally. Now for a proper response based on this more detailed information.

That would depend on the outlook for rates for your defined period- date of lock through clsoing. You may have to pay an upfront fee at 60 days but not for 45 which means you are only susceptible to the market changes for 15 days. This is a lot less risky than being susceptible to market changes for the full 60 days, but in the end its a personal descision.
Best way to make this decision when the time comes is to get information from your LO as to the expectations for the market between the day you have a contract in place and the time in which you can lock without any upfront fees.
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Old 02-04-2010, 12:28 PM
 
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Your inital post was very detailed. Either way, 60 day locks where I work are of no charge. And most people close in less than 60 days. Fees come into play when you're dealing w/ 60+ days. And even then, it's not 1%. So, either way, I would not.
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