Mortgage Rate Lock - Opinions Needed

[Murpheeee]

I am buying a new house soon (hopefully).

We were supposed to be closing on Jan 9th, but our buyer's buyer is holding things up and we still have no closing set.

My interest rate lock is set to expire on Jan 23, and to extend it its going to cost me $200.

The current interest rate is 0.25% lower than I am locked at, so I am tempted to let it expire.
However, if it does expire I cannot re-lock for 30 days, so if my closing is delayed say 21 days....who knows where the rate will be then.

So....what would you do?

Extend lock for $200 or gamble?

 

[CPA]

Have the seller pay it, since it's his hold-up that is causing you the expense. threaten out of the deal.

 

[Murpheeee]

can you do that since its two separate deals?


the delay is on the sale of our current house.

the fee is for the mortgage for our new house purchase.

 

[FoBoT]

rates aren't going to change much , let it go

 

[trulfe]

just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

 

[Murpheeee]

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

well I have already paid them $465 in application and appraisal fees

 

[CPA]

Originally posted by: Murpheeee
can you do that since its two separate deals?


the delay is on the sale of our current house.

the fee is for the mortgage for our new house purchase.

ooops, misunderstood the original post. No, you won't be able to get your buyer to pay for this, most likely. Just let it go.

 

[Yax]

Originally posted by: Murpheeee

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

well I have already paid them $465 in application and appraisal fees

Wow, that's alot to pay. I know several companies that charge less. It may be worth it to just go with another company. The lower rate will make up for the difference in a couple of months.

 

[BooGiMaN]

what are mortgage rates at nowadays

 

[Murpheeee]

30 year @ 5.75%

 

[dirtboy]

Before you let your lock expire, you may want to seek legal counsel. I don't know what laws are pertaining to this, but you may have a contract that says you are obligated to perform in some manner. If you let the lock expire and you can't get another for 30 days, that my jeapordize your position. Your mortgage person should know what to do.

 

[Gand1]

If your at 5.75 it's pretty damn good. I just locked in at 5.625 with an FHA and was told that's about as good as it's going to get.

 

[Murpheeee]

Originally posted by: Gand1
If your at 5.75 it's pretty damn good. I just locked in at 5.625 with an FHA and was told that's about as good as it's going to get.

no I am locked at 6%......the rate is currently 5.75%

 

[trulfe]

Originally posted by: Murpheeee

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

well I have already paid them $465 in application and appraisal fees

I guess it depends where you live and how much your house is going to cost. Here in the bay area where houses an avg house is at least $600k...you would save at least $1200 in the first year alone with that .25% decrease.. but its all relative to whether its worth it to you or not.

 

[Vic]

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

That's always the stupidest way to go about it. By changing companies, you incurr new fees, not to mention that you have to start the process all over from the beginning again, easily adding a couple of weeks to the process plus reintroducing the possibility of the loan not going through. Plus, it's cruel as it's not the lender's fault that the loan is postponed.

Murpheeee, the number 1 rule about rate locks is never to let them expire. However, if market rates have improved since your original lock, most lenders will grant a short (10 to 20 day) rate lock extension for free. Are you going through a broker by chance?

 

[Murpheeee]

Originally posted by: Vic

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

That's always the stupidest way to go about it. By changing companies, you incurr new fees, not to mention that you have to start the process all over from the beginning again, easily adding a couple of weeks to the process plus reintroducing the possibility of the loan not going through. Plus, it's cruel as it's not the lender's fault that the loan is postponed.

Murpheeee, the number 1 rule about rate locks is never to let them expire. However, if market rates have improved since your original lock, most lenders will grant a short (10 to 20 day) rate lock extension for free. Are you going through a broker by chance?

I am going through CitiMortgage

They gave me the option of buying an extension for 5, 10, 15, 20, 25 or 30 days
But I cannot take a day-at-a-time extension, I must buy set period in advance

 

[FoBoT]

Originally posted by: Murpheeee
30 year @ 5.75%

i am quoted 5.75% and am scheduled to close on March 2 if no unforseen delays are encountered

doing inspections tomorrow, yay

 

[trulfe]

Originally posted by: Vic

Originally posted by: trulfe
just start looking at a different mortgage company. If you can get .25% lower..and your current company isnt willing to then go with a new company...theres no obligations right?

That's always the stupidest way to go about it. By changing companies, you incurr new fees, not to mention that you have to start the process all over from the beginning again, easily adding a couple of weeks to the process plus reintroducing the possibility of the loan not going through. Plus, it's cruel as it's not the lender's fault that the loan is postponed.

Murpheeee, the number 1 rule about rate locks is never to let them expire. However, if market rates have improved since your original lock, most lenders will grant a short (10 to 20 day) rate lock extension for free. Are you going through a broker by chance?

A mortgage company should not take more than 14 days to approve you for a loan especially in this slowed down market and assuming you already have the required documentation from the last application. The fees are very minimal upfront, most of them are in the closing costs. You dont incurr these fees unless you take the loan, and like stated before, depending on the purchase price of you home, could easily repay itself in a matter of months.

Im sorry but I cant believe you think it would be cruel to a mortgage company...if they are not willing to serve whats in your best interest before you've even signed the loan docs...do they really deserve your business? You already pay them some fees upfront for their time and if it was a matter of saving thousands of dollars off the loan, then I wouldnt hesitate to take my business elsewhere.

 

[Vic]

Originally posted by: trulfe
A mortgage company should not take more than 14 days to approve you for a loan especially in this slowed down market and assuming you already have the required documentation from the last application. The fees are very minimal upfront, most of them are in the closing costs. You dont incurr these fees unless you take the loan, and like stated before, depending on the purchase price of you home, could easily repay itself in a matter of months.

Im sorry but I cant believe you think it would be cruel to a mortgage company...if they are not willing to serve whats in your best interest before you've even signed the loan docs...do they really deserve your business? If it was a matter of saving thousands of dollars off the loan, then I wouldnt hesitate to take my business elsewhere.

Well...
- It's not the mortgage company's fault that closing has been delayed and that Murpheeee will blow his rate lock. Granted it's not Murpheeee's fault either. He really should call his listing agent to put some pressure on the selling agent and the buyers.
- I'm 99% certain that Murpheeee is mistaken about the 5.5%. At least that's not what I'm quoting my borrowers today for low-fee Fannie/Freddie 30 fixed purchases, and neither are friends I have at other lenders. Either he got that rate off bankrate.com (whose daily mortgage rates are a joke), or the other company who quoted him that forgot to tell him about the buy-down points that would come with that rate.

As for most of the rest, I don't think you know what you're talking about. Most lenders don't just lock people in without their permission. I'd be willing to wager long odds that Murpheeee knew when his loan was locked in, for what rate, for what fees, and when he needed to close it. On top of all that, he received disclosures with all the rate lock terms and details on it.

Regardless, 5.75% is an excellent amazing rate. We are still firmly at historical lows. You wanna take a chance on getting a quarter better, good luck, but I got a hot tip on a penny stock for ya too

Murpheeee, before you pay to get your lock extended, get a closing date from the selling agent. He/she is the fault here and is really dropping the ball.

 

[Murpheeee]

Originally posted by: Vic

Originally posted by: trulfe
A mortgage company should not take more than 14 days to approve you for a loan especially in this slowed down market and assuming you already have the required documentation from the last application. The fees are very minimal upfront, most of them are in the closing costs. You dont incurr these fees unless you take the loan, and like stated before, depending on the purchase price of you home, could easily repay itself in a matter of months.

Im sorry but I cant believe you think it would be cruel to a mortgage company...if they are not willing to serve whats in your best interest before you've even signed the loan docs...do they really deserve your business? If it was a matter of saving thousands of dollars off the loan, then I wouldnt hesitate to take my business elsewhere.

Well...
- It's not the mortgage company's fault that closing has been delayed and that Murpheeee will blow his rate lock. Granted it's not Murpheeee's fault either. He really should call his listing agent to put some pressure on the selling agent and the buyers.
- I'm 99% certain that Murpheeee is mistaken about the 5.5%. At least that's not what I'm quoting my borrowers today for low-fee Fannie/Freddie 30 fixed purchases, and neither are friends I have at other lenders. Either he got that rate off bankrate.com (whose daily mortgage rates are a joke), or the other company who quoted him that forgot to tell him about the buy-down points that would come with that rate.

As for most of the rest, I don't think you know what you're talking about. Most lenders don't just lock people in without their permission. I'd be willing to wager long odds that Murpheeee knew when his loan was locked in, for what rate, for what fees, and when he needed to close it. On top of all that, he received disclosures with all the rate lock terms and details on it.

Regardless, 5.75% is an excellent amazing rate. We are still firmly at historical lows. You wanna take a chance on getting a quarter better, good luck, but I got a hot tip on a penny stock for ya too

Murpheeee, before you pay to get your lock extended, get a closing date from the selling agent. He/she is the fault here and is really dropping the ball.

Thanks for all your advice.

The agent is not really at fault either....its kind of a long story.
Our buyers have to sell their house before they can buy ours. Turns out a previous owner of that property had a bankruptcy filing. Their buyer's attorney wants proof that the property is not subject to any creditor claim from the bankruptcy. The delay is in getting paperwork sent over from the bankruptcy court.
They said 1-2 weeks, its now 3 and counting.

So nobody can give us a firm closing date, as it all depends on when those papers arrive, that is all thats holding things up.

I would hope that it would be in the next few days, hence the reason I am tempted to let the lock expire.....but I would have said that 2 weeks ago