Locking In A Mortgage Rate

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MORTGAGE LOAN RATE LOCKS

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LOCKING IN A MORTGAGE RATE

A rate lock is a promise by a lender to close with a specified interest rate and point value for you while the loan is still processing provided the loan is closed within a set number of days. The lender typically gives 30 days from the time the rate is locked to close the loan. When rates are rising this gives the borrower a lower rate than what he would get on the day the loan closed. The downside is that if the rates start going down the lender isn't about to lower the locked in rate unless the lender agreed to a float down which allows for the downward adjustment of the lock

Often when a lender refuses to go slightly lower a locked rate the borrower threatens to cancel the loan process and go to another lender. This practice should be considered carefully as more often than not the costs involved in starting the process over and potential of the seller backing out for not meeting the deadlines are more costly than what the rate difference would have cost.

Although every effort has been made to keep this information accurate, the information provided by the First Arkansas Financial website is provided for information purposes only. First Arkansas Financial makes no warranties or representations about the completeness or accuracy of the information provided in the content found in the First Arkansas Financial website. The information contained within may or may not apply to your specific situation, and it should not be construed as financial advice. Because financial requirements are continually changing, please consult a mortgage professional with any questions you may have. First Arkansas Financial Inc. is a mortgage broker that provides home loan financing services in the following states: Arkansas, Missouri and Texas.

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