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Frequent Contributor
cookiebird
Posts: 280
Registered: ‎05-16-2013
0

rate lock advice

Back before the government shutdown I locked my interest rate and it is set to expire on 10/21.  The house is ready to close but I am doing a USDA loan so the government shutdown put it all on hold. There is no way I will be able to close on Monday so looking for different opinions on what I should do.  I am not a gambler so part of me is telling me to relock but I don't think I got the a very good rate to begin with. My current lock is at 4.875%.  It looks like rates have been hovring around 4.01% now for a few weeks. If you were in my shoes would you pay the rate extension fee or just float and hope it doesn't go higher than the original lock?




last app 11/13/2013 gardening for at least a year
Regular Contributor
themizlyne
Posts: 185
Registered: ‎07-06-2013
0

Re: rate lock advice

Personally, I would let the lock expire unless your LO will give you the lower of your current lock or the current rate.
Super Contributor
DallasLoanGuy
Posts: 6,178
Registered: ‎07-03-2007
0

Re: rate lock advice

if i could get away with NOT paying.... i wouldnt pay.

 

i cant believe a lender would have the balls to ask for a rate extension fee.... i have always eaten them

 




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New Contributor
stillworking
Posts: 72
Registered: ‎09-25-2013
0

Re: rate lock advice


cookiebird wrote:

Back before the government shutdown I locked my interest rate and it is set to expire on 10/21.  The house is ready to close but I am doing a USDA loan so the government shutdown put it all on hold. There is no way I will be able to close on Monday so looking for different opinions on what I should do.  I am not a gambler so part of me is telling me to relock but I don't think I got the a very good rate to begin with. My current lock is at 4.875%.  It looks like rates have been hovring around 4.01% now for a few weeks. If you were in my shoes would you pay the rate extension fee or just float and hope it doesn't go higher than the original lock?


wait for a lower rate.. they are coming down even further since the government shutdown caused a decrease in the value of treasury bonds.  Once the market stabilizes and their price goes up, mortgage rates will go down.  The winter is the PERFECT time to buy, since many people are getting ready for the holidays and not buying houses as much.  


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Established Member
akomayaa
Posts: 14
Registered: ‎08-06-2013
0

Re: rate lock advice

My closing was scheduled for 11/11 but had to extend it because there were delays in inspection and the builder did not want to rush the job. My new closing date is estimated at 11/21 and my LO is asking for me to pay for an extension fee. I locked my rate at 4.00% and am considering doing it. If you think you can get a cheaper rate by time of closing, let it expire and hope nothing crazy happens in this unstable interest market.....good luck!

Frequent Contributor
cookiebird
Posts: 280
Registered: ‎05-16-2013
0

Re: rate lock advice

So today is the day my rate lock expires. I had made up my mind this weekend to not relock it and let it float BUT I got an email this morning from my LO saying I can't do that. She said if I let it expire then I have to start the whole process over with UW and being submitted back to USDA.  Does that sound right?  I was hoping that having to wait through the govt shutdown maybe at least it would pay off with a better interest rate. Now i get to pay a huge fee to get the not very good rate I had. :smileymad:

 

 




last app 11/13/2013 gardening for at least a year
Frequent Contributor
Sunshine85
Posts: 367
Registered: ‎01-14-2012
0

Re: rate lock advice

[ Edited ]

The rate has to be locked before the file is submitted for the final underwrite and to USDA. As long as your file hasn't been submitted for the final underwrite, expiring and relocking should not be an issue.  

 

Also, I'm not sure if your lender has this policy, but the ones I dealt with operated on "worse case scenario". Meaning, if a lock expired, the borrower would get the rate they originally locked at, or current pricing, whichever was **higher**. Double check with your lender on their policy. 

.

I agree with DLG, though; I would not pay an extension fee. I would get the lender to eat it.

Frequent Contributor
cookiebird
Posts: 280
Registered: ‎05-16-2013
0

Re: rate lock advice

I am through UW and my file has already been submitted to USDA. It will probably be next Monday or Tuesday until USDA gets to my file. I do not want to start all over again from the beginning so according to my LO i have to relock at the rate I originally locked in at.

 

So my LO just emailed me as I was typing this and said they are not charging me to relock since the govt shutdown was not my fault!  YAY!!!!  Still get the higher interest rate I origianlly locked at but at least I don't have to pay the fee.

 

 




last app 11/13/2013 gardening for at least a year
Frequent Contributor
Sunshine85
Posts: 367
Registered: ‎01-14-2012
0

Re: rate lock advice


cookiebird wrote:

I am through UW and my file has already been submitted to USDA. It will probably be next Monday or Tuesday until USDA gets to my file. I do not want to start all over again from the beginning so according to my LO i have to relock at the rate I originally locked in at.

 

So my LO just emailed me as I was typing this and said they are not charging me to relock since the govt shutdown was not my fault!  YAY!!!!  Still get the higher interest rate I origianlly locked at but at least I don't have to pay the fee.

 

 


Ok- yeah, since you had already received lender approval and gone to USDA, a lock expiration would definitely have caused an issue. 

 

Glad to hear your lender is doing the right thing and not charging for the relock. 

Super Contributor
DallasLoanGuy
Posts: 6,178
Registered: ‎07-03-2007
0

Re: rate lock advice

if anything changes.... the file goes back to uw

even if the rate goes down.  <= i know it sounds silly.... but that is just the way it is.

 

 




* While I try to visit the forum often, please feel free to contact me directly with a link to your post if I fail to answer a follow up question.

* Lending across the entire 'Great State of Texas' since 2004

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