Mortgage Loans

[cobaltnv]

Last week my wife and I locked in our interest rate (4.875 with 1 point)--which is great. I think I could currently get the same rate without the point from the same lender (saving more than 3k). Does anyone know what the penalties are for breaking a lock agreement? If it matters my wife and I have not submitted the final paperwork on the loan app yet. I will be talking to my lender this afternoon, but thought I would get advice here first. In 5 years I will not care because 4.875 is such a great rate, but it would be even better to get it without the point :-).

Thanks in advance.

Cheers 

[hawkeye33]

I'm not sure how easy it is to get out of the point. With my lender, the way it was explained to me was that after I locked, if rates dropped significantly, I could exercise an option to meet the lender half way between the current prime rate and my rate without any financial penalty. Or, I could pay a fee (can't remember what it was) to get all the way down to whatever the prime rate had dropped to.

[cobaltnv]

Thanks for the reply hawkeye. I spoke to my LO yesterday afternoon and she did exactly as you stated. She dropped 0.5 points. I will also get a 0.25 point discount for banking with US Bank (my lender). So I am pretty happy we are getting a rate of 4.875 with 0.25 points.  

[MortgageBanker007]

 That's great but what if you could get that same rate without points?! Make sure the LO actually locked it by asking for the lock confirmation...they may or may not want to give that to you. with your scores and todays rates you should be able to get 4.875% NO POINTS and close quickly.