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Locking your interest to extend?!?!

Valued Member

Locking your interest to extend?!?!

My application for a USDA guaranteed loan has been approved with few conditions. This is new construction and it will probably take 4 months to complete. LO said we can only lock rates for 60 days. If I wanted to lock rates for an extended period, let's say 120 days, I would have to pay an additional $1,300 that is non-refundable. Really? She also said the rates will probably increase if we haven't closed during the allotted time (120 days). I don't think we are going to close in 4 months because the loan still has to go to USDA for approval which could take up to a month. I just need to know if anyone on this forum has experienced this? If not, should I try to find another lender? Any input/advice would greatly appreciated!

Nervous first time home buyer! Smiley Happy
Equifax: 6/2013 (647) / 10/2013 (647) / 11/13 (654) / 6/05/14 (725)
Experian: 6/2013 (673) / 10/2013 (684) / 12/12/13 (692)
TU Walmart: 6/2013 (683) / 10/2013 (693) / 01/2014 (704) / 06/05/14 (705)
Goal Score: 700 across the board

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Frequent Contributor

Re: Locking your interest to extend?!?!

Some lenders i've talked to will lock the rate in as far as 6 months out...I'd suggest shopping around.

Message 2 of 3
Established Contributor

Re: Locking your interest to extend?!?!

It is very rare to find lenders to lock in a rate for free for more than 60 or 90 days. Most lenders won't even let you pay to lock in the rate. This costs thousands of dollars over the life of the loan in the long run when you lock in a lower interest rate when they can stick you with one slightly higher.

Starting Score:TransUnion: 698 (12 FEB 2010), Equifax: 674 (12 FEB 2010)
Current Score (Lender Pulled):TransUnion: 684 (12 SEP 2016), Equifax: 696 (12 SEP 2016), Experian: 679 (12 SEP 2016)
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