Bo Thompson
What does it mean to lock or float an interest rate during the application process?
Bo Thompson
American Dreams Mtg
320 Nancy Lynn Ln Suite B
Knoxville TN 37919
Cell 865-621-1781
Direct 865-934-1665
bo@bothompson.com
Mortgage loan interest rates can change on a daily basis. Some prefer to avoid this uncertainty by locking in the rate that is valid at the time of their application. Others prefer to "float" their rate, or take a risk on the market, which determines interest rates. A lock agreement must be executed by all parties of the application in order for the lock to be valid. Changing from a "Float" to a "Lock" decision can be done over the phone only if you have previously decided to "Float" during the initial application process. Requests for an interest rate lock cannot be allowed via U.S. Mail since rate swings could occur during the mail delivery. Please ask for other features of our rate locks.
What if I change my mind after locking, or I don't meet the deadline for the lock-in period?
If you elect to lock-in, you are locked. You will never close at a lower rate and points than the original lock-in. If your loan does not close within the lock-in period and rates are higher at the time of your loan closing, you will close at the higher rate. If your loan does not close within the lock-in period and rates are lower at the time of your closing, you will close at the lock-in rate. No guarantee can be made that your loan will close within the lock-in period because unusual delays may occur. Typically, from loan application to closing and funding should not last longer than 30 days. Any delays in obtaining critical information or reports may cause loan files to exceed this time frame.