Locking your interest rate for your home loan

Step 2. (Confirm/lock rate)

At this stage you are already been pre-qualified by your loan officer and his file already includes your income and asset documentation which should have been collected in step 1. At this stage you have selected a property to purchase and your offer has been accepted. Now is the time to lock down your pricing and finalize your loan terms. Signatures for the application and disclosure should be signed at this time. The purchase price, interest rate and payment are now finalized. Before your rate is locked and loan is confirmed any payment or interest rate quotes, are estimates. Interest rates change with the market therefore, don’t get too excited, or take payment estimates too serious until you have locked in your rate.

Most all the components of a loan are difficult to grasp as a borrower. Interest rates, origination fee, points, and other miscellaneous fees are hard to sort through. Your lender should be more than willing to help you compare and contrast rates with regard to paying points and zero points. Zero point would be great, but keep in mind nothing is free. A zero point loan will result in a higher interest rate than if you pay points. Your loan officer will help you determine the long term savings vs. the upfront costs of paying points on a loan.

It’s now time for your lender to work with your Agent, Escrow & Title Company and submit your complete loan package to the underwriter who reviews it for approval.