Lock-ins
make sense when borrowers expect
rates to rise during the next 30
to 60 days, which is the usual length
of time lock-ins are available.
A
lock-in given at the time of application
is useful because it may take the
lender several weeks or longer to
prepare a loan application (though
automated loan practices are cutting
this time dramatically).
However,
some lenders require borrowers to
pay lock-in fees to assure particular
rates and terms. Be sure to check
that the rates and points are guaranteed
and that your lock-in period is
long enough. If your lock-in expires,
most lenders will offer the loan
based on the prevailing interest
rate and points.
Lenders
may have preprinted forms that set
out the exact terms of the lock-in
agreement. Others may only make
an oral lock-in promise on the telephone
or at the time of application.
Resources:
* "Consumer's
Guide to Mortgage Lock-Ins"
from the Federal Citizen Information
Center (800) 333-4636; pueblo.gsa.gov.
