When we went through the application process to refinance our house we locked our interest rate for 45 days at 4.875% for a 30 year fixed loan. We are quickly approaching the end of the lock period and I have found myself feeling a little bit stressed because interest rates have gone up a bit.
When I looked in to what would happen when my rate expires I was disappointed to find that the credit union had stacked the deck in their favor. If my rate expires and the current available rate is lower than the rate I locked, the credit union will still give me the higher rate that I locked. If my rate expires and the current available rate is higher, they’ll switch me to the higher rate. Talk about having your cake and eating it too.
So, like I said, I’ve been concerned that my refinance is not going to close before the lock expires. I sent a note a little over a week ago and my loan consultant replied that the loan would close before the rate expired. That was 8 days ago and I haven’t heard from her since.
This morning I sent another email to my loan consultant and said I had a lot of concern that this was not going to close in time and I had absolutely no interest in a loan with an interest rate a full half point higher. I was happy to get a quick reply from her apologizing for the delay. She said that they have had a much higher volume of loans and that it’s taking longer to process them. She said that due to the higher volume, they would extend my rate lock at no cost to us.
Phew! That made me feel a lot better. I would like to see the loan close this month so that I don’t have to make another payment to my current lender, but if it doesn’t it won’t be a huge deal.
Hopefully they will put that (rate lock extension) in writing before the expiration. If not I’d raise hell. Sorry, don’t want to make you worry, but I rarely trust anyone. Plus, after you mentioned how they stack the deck in their favor when the rate expires; I’d be even less likely to trust these knuckleheads.
My loan officer said they’d honor my rate lock beyond the normal time frame as well. It seems many are doing that because the underwriters are both overwhelmed with high volume and taking more time to review applications.