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is the mortgage company contractually obligated to the rate in the loan application?

by vsaeger811 from Woodruff, Wisconsin. Jan 9th 2017 Reply


Joe Becker (JoeBecker)
#60 ranked lender in Minnesota - 53 contributions

Depends on what stage of the process the loan is in and also if the rate was locked during the process. What is your scenario?

Jan 9th 2017
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David R Youngs - Senior Mortgage Consultant (DavidRYoungs)
#66 ranked lender in Minnesota - 36 contributions

Great question! What many may not know is that technically speaking you are locked into the rate "PRICING" of that date, based on what the cost was as of the lock date. You as the borrower have the right to adjust your rate if you choose, but it would be based on the rate pricing/cost as of the previous date you locked. When you lock in, you lock for a specific time period, typically 15, 30, 45 or 60 days. As long as your new loan closed AND funds within this time period, then you will be able to get the rate you locked on. That said however, keep in mind that you are locked based on your current qualifying terms (Ex: your credit, the home's appraised value, property type, etc.). If anything changes regarding your qualifications, then this could impact the rate "price," however again this would be based on the original pricing from the date you locked. It is important to read through your "rate lock agreement" disclosure form carefully to fully understand what you and the lender's commitments are to one another. This should give you a clear understanding of what you are agreeing to. Some may even choose to have a real estate attorney review these types of documents, in order to ensure that your interests are being met and to perhaps obtain a clearer understanding of the legal agreement. Above all, the most important thing you can do to ensure your interests are protected is to work with a highly qualified, knowledgeable and honest Mortgage Professional that is able & willing to take time to answer your questions and explain the loan process beginning to end. If you have any specific questions or would like a FREE consultation, feel free to contact me at 651-636-2840 Ext 12 or email me at dyoungs@progressivels.com. Thanks!

Jan 9th 2017
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 7,466 contributions

No.. the application and the documents that accompany it are considered to be "Estimates"... Once your loan is "Locked in".. and you meet the closing deadline associated with the lock, then yes.. that is the rate you will get.. when "Fee's" are disclosed, the law protects you in regards to them increasing.. some fee's have Zero tolerance, some have a 10% leeway.. and some 3rd party fees have no protection.. but the rate is subject to the market at the time you lock. I'm the preferred Lender here in Scottsdale AZ, and Arizona and California is my primary market. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Jan 10th 2017
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Mike and Jill Kohler (LenderMike)
#32 ranked lender in Pennsylvania - 54 contributions

Rates definitely fluctuate and you would have to find out the details of the rate lock. Was it locked? Most times the mortgage company is not obligated to initial interest rate on the application. That was the rate that was current at the time, but all kinds of things change during the process. See if there was a rate lock in place and what the duration of it was.

Jan 22nd 2017
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