Interest rates went down since we locked the rates (loan officer, 2015, approved)
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The interest rates went down since we locked the rates. We are closing in 2 weeks. Is there anything we can do to get the lower rates. Thank you for any help.
The interest rates went down since we locked the rates. We are closing in 2 weeks. Is there anything we can do to get the lower rates. Thank you for any help.
I could be wrong, but I think once you're locked, you're locked. The bank wins.
Some have float down options. Some renegotiate. I have a lender I deal with who suspended all renegotiations in order to make more $$$ at this time (regional bank)
I'm a mortgage broker.
Call your lender/broker/loan originator and speak to them. I'm sure they will do what they can.
Would it be completely unethical to go with another lender? Is it assumed that once you lock in with one lender, you have to stay with them and not go to someone else?
I'm in the same boat as the OP. Locked in at 4.5%, now the rates are around 4.1%.
Do people ever think about the flip sid of this? What if rates go up and the bank wanted to raise them?
I totally agree with you, manderly (and congrats on that refi you just did. Excellent judgement on your part, especially if you make extra payments to pat down the principle as you said you intend to.)
That said, yes, call the broker / lender and see if they will work with you. When they lock the loan, they pay a fee to the lender. If they are already making a good profit off your loan, they MAY be willing to absorb eating another fee. Not likely, so you might suggest that you will pay it. But even then, the broker gets dinged when they lock a loan and it doesn't close - so it's really not in their best interest to do this. It's considered a bad business practice, but you've got nothing to lose by asking.
As for switching to another broker / lender - yeah, I would say it stinks, but people will do it without batting an eye. You will lose any application fee you paid. You will need to pay for another appraisal. Can another company get this closed in two weeks? Are the fees the same for the lower rate? Do you enjoy stress? What if the new appraisals don't come in high enough? What if it backfires on you and the new lender has an underwriter that turns you down?
Me - I'd ask the current group if they will work with you. I'd consider giving them another 300-500 bucks at closing to cover their lost lock fee and extra paperwork. If not, I'd stay with what I already had, count my lucky stars for actually getting a loan closed, enjoy my house and realize that throwing a few extra bucks at the principle balance of this loan will save you more interest than a lower rate anyway. AND get the mortgage paid off early.
Me - I'd ask the current group if they will work with you. I'd consider giving them another 300-500 bucks at closing to cover their lost lock fee and extra paperwork. If not, I'd stay with what I already had, count my lucky stars for actually getting a loan closed, enjoy my house and realize that throwing a few extra bucks at the principle balance of this loan will save you more interest than a lower rate anyway. AND get the mortgage paid off early.
I am of the same opinion. I was able to re-lock my rate once from 4.5% to 4.25% for a $250 fee. The bank is now offering 4% as rates just keep dropping. But if I were to re-lock again ($500 fee for a 2nd re-lock), they would have to re-draw the paperwork and delay closing by possibly another week which puts me right up against the deadline the seller gave me to close. And that's another week that this deal could possibly fall apart in. At this point I've been through so much stress with this whole process I just want to get it closed and be happy with my 4.25%, which is still an incredibly low rate. And as Jkgourmet said, I am counting my lucky stars I was able to get a loan and am closing on my first home today.
When we bought our first house in 1997, the rates went down right before we closed...we were set to close on Monday and my DH called the bank on Friday and told them we were approved with another lender and if they didn't lower the rate we were going to bail. It worked, they gave us the lower rate.
Not sure if this kind of thing can work nowadays, but it's worth a shot. At some point though, you have to realize you are getting historically some of the lowest rates ever and not be too upset about it. We were over 7% back in the late 90s.
When we bought our first house in 1997, the rates went down right before we closed...we were set to close on Monday and my DH called the bank on Friday and told them we were approved with another lender and if they didn't lower the rate we were going to bail. It worked, they gave us the lower rate.
Not sure if this kind of thing can work nowadays, but it's worth a shot. At some point though, you have to realize you are getting historically some of the lowest rates ever and not be too upset about it. We were over 7% back in the late 90s.
Very rare this strong arm tactic would work today- it is not worth a shot as it can backfire horribly for you. Besides the fact that you are out right lying (no this is not negotiating) which is a wonderful way to conduct yourself in a business relationship, most lenders require a credit update just before closing to make sure there are no inquiries or new credit issued by others during the process. Mostly what they are looking for is car loans, furniture things like that but your loan officer will know whether there have been inquiries.
You call me with "I'm approved elsewhere- lower my rate and I'm going to walk" I look at your updated credit and know immediately where you stand.
I totally agree with you, manderly (and congrats on that refi you just did. Excellent judgement on your part, especially if you make extra payments to pat down the principle as you said you intend to.)
That said, yes, call the broker / lender and see if they will work with you. When they lock the loan, they pay a fee to the lender. If they are already making a good profit off your loan, they MAY be willing to absorb eating another fee. Not likely, so you might suggest that you will pay it. But even then, the broker gets dinged when they lock a loan and it doesn't close - so it's really not in their best interest to do this. It's considered a bad business practice, but you've got nothing to lose by asking.
As for switching to another broker / lender - yeah, I would say it stinks, but people will do it without batting an eye. You will lose any application fee you paid. You will need to pay for another appraisal. Can another company get this closed in two weeks? Are the fees the same for the lower rate? Do you enjoy stress? What if the new appraisals don't come in high enough? What if it backfires on you and the new lender has an underwriter that turns you down?
Me - I'd ask the current group if they will work with you. I'd consider giving them another 300-500 bucks at closing to cover their lost lock fee and extra paperwork. If not, I'd stay with what I already had, count my lucky stars for actually getting a loan closed, enjoy my house and realize that throwing a few extra bucks at the principle balance of this loan will save you more interest than a lower rate anyway. AND get the mortgage paid off early.
Good point, not to mention rate are fluctuating daily, while they have come down since you locked the rate, who is to say where they will be when you are able to lock in the new rate. You could be right back where you started from or even higher and be out the $$ for the new appraisal.
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Rate Locks
