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Reasonable Fee for Extending Rate Lock?

I need to extend the rate lock and the lender wants to charge .25 points for a 14-day extension. Is that reasonable? by fredm202882 from Manhattan Beach, California. Jan 25th 2017 Reply


Hryer Kaprealian (hryer.kaprealian@guaranteedrate.com)
#1290 ranked lender in California - 2 contributions

I don't charge my clients for the lock extension.

Jan 25th 2017
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That is approximately the going cost for a lock extension, especially considering the market has probably gotten a bit worse since the loan was locked. I personally always cover my clients extensions with a lender credit.

Jan 25th 2017
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Matthew Rundle (MatthewRundle)
#506 ranked lender in California - 8 contributions

This is an excellent question. The first item to address is why is the lock expiring? Having a solid strategy when entering a transaction provides the foundation to avoiding having to extend a lock. All lenders have a cost to extend a lock and the amount you are being charged is appropriate for the current market. How your loan officer or lender choose to assess the lock is dependent on them. They key is to set a reasonable time frame from the beginning. Also, in some cases, if the market improves, there may be no cost to extend. Who is responsible for the lock expiring is where I'd start and negotiate from there. Best of Luck.

Jan 25th 2017
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Mark Hemingway (SFSLend)
#1 ranked lender in Colorado - 584 contributions

Mortgage Brokers should not be charging you a lock extension; however, the lender may be charging you a lock extension. Depending on when you lock you may want to ask the lender what the rate and pricing would be if you let it expire and then relock. Some lenders may also have a relock fee but would be less than 0.25%. Rates have gotten worse throughout the week so it may be necessary to extend your lock. But a cost of 0.25% is not bad for extending 14 days.

Jan 26th 2017
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,000 contributions

Yes.. that is a reasonable fee, but the question is why? Why is the rate lock extension necessary? If it was because of delay's from your lender, then they should waive it.. if it was because of others issues out of your lenders control.. (title problem, seller problem, buyer problem, property problem, etc.) then you should just pay it.. rates have gotten worse, so it's absolutely in your best interest to extend.. otherwise, you would be subject to "Current Rates".. I'm a preferred Lender with Arizona and California being my primary markets. 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 26th 2017
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