Rate lock etc

[Anonymous]

We have been involved in a nightmare trying to refinance our mortgage with our current lender.  The agent we have been working with is horrible, non-responsive- the list goes on and on.  Most recently I had to escalate up to the regional manager before I could get anyone to give me an update on our loan.  It looks like things got backed up and we were supposed to close by 9/20 and never heard a thing.  According to my paperwork, the rate expired today.  I finally heard from the Regional Manager today and was told that they extended our rate for another 30 days (she made it a point to say they absorbed the cost) and that our loan just passed underwriting and they are waiting on employment verification and we should be all set.  When I asked her what today's rate would be she quoted me 5.5 with 3/8 of a point. We locked in at 5.5 with 3/4 point. She told me that if we wanted the lower rate, we would have to return to float and relock. I questioned this as, technically the rate expired today, so why couldnt we relock at the lower rate. Her response was that they extended if, even though I never authorized it and if they let it expire, it would cost quite a bit of money.  From my perspective, given all of the problems we have dealt with, I would think it would be nothing for them to drop the points.  Since the paperwork I had indicated the rate expired today, do I have any recourse to try to fight to lock in at today's rate??"

[Anonymous]

Ug, sorry for your pain.  The 3/8ths is a problem.  I'm not sure if it is the biggest one.  

 

Those rates sound very high.  As of yesterday, refinance rates were closer to 5% for 30 Year Fixed assuming good credit. The one-time 3/8ths hit is small compared to paying .25-.5% extra each and every year. 

Credit and Equity do influence mortgage rates, but it isn't a big mystery.  For each 20 points below 740 FICO, 'something' changes.  The 'something' is a specific expense (in dollars or a higher rate) that is tacked onto a loan in the form of Fannie Mae LLPA.  Google Fannie LLPA or I did a video a long ways back Fannie Mae Loan Level Price Adjustments

I wouldn't have enough information here to tell you if that rate is good/bad/otherwise, but it seems high.  Option 1 would be to simply get a more fair rate.  Option 2 would be to look at an FHA.  Option 3, maybe Option 1, would be to get another quote.  Depending on the size of your loan, saving .5% on the rate would be worth investing in an additional appraisal with a new lender. 

[Anonymous]

Thanks for your response!  Our rate is a little higher because we are doing a FHA 203K, which I know generally run a bit higher than normal rates.

[Anonymous]

That makes more sense.  That's a pretty good program, with some inherent headaches, but you're close.

You should probably have enough info to get either a slightly better rate or 0 points.  

I hope you love the new home!!!