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My loan was "pre-approved," but I've discovered that this is the world's greatest misnomer. I made an offer on Aug 21, based on a pre-approval from our lender, and we're still not clear to close. The rate lock is set to expire on Sept 25, and the lender wants to charge us half a point to extend the lock, despite the fact that the lender's current rates are actually lower than the one we locked. :-o
It's all the more annoying, given that:
Question: Do I have any realistic alternatives to coughing up half a point? I'm actually tempted to walk away from the deal, entirely, but I'm not sure what sort of penalities I'd face. Obviously, I'd lose the cost of that awesome appraisal, plus the quarter point I paid to lock the original rate, plus the $50 credit report fee. But if I closed with someone else at current rates, my savings over the life of the loan would actually exceed all of that. But given the slimy nature of this lender, I can't help thinking there are other penalties that I'm not even imagining.
Thoughts?
If your rate lock expires, won't you just be given their current rate, which is lower anyway? Seems like there's no reason to pay to extend the locked-in rate.
that doesn't sound right. if the current rate was higher, they will be quick to tell you 'if you dont lock again, you will get the higher rate'.
Do you have a copy of the actual lock in agreement you actually signed?
I just looked at mine, and all it basically says is that if the agreement expires, you "may" have to pay a higher interest rate if the rates at the time are higher.
I would check first to see if the document you signed says you MUST keep paying to extend the agreement.
basically, the pre-approval means that you are "approved to begin your journey through Hades (good luck with making it out alive)". LOL
When locks expire and rates are better, your loan gets re-locked for free.
At least, with every company I have ever worked for.