Every home owner or home buyer should be concerned about the interest rate on their mortgage. Even though the idea of floating the rate, a practice long used to anticipate lower interest rates, has been greatly hampered by the new Real Estate Settlement and Procedures (RESPA) "improvements" it is still possible for an experience mortgage professional to await a better rate.
Mortgage interest rates are locked when the mortgage officer asks for the lender to temporarily hold aside the amount of the loan for a specific number of days. You may have heard of ten day, thirty day or even forty-five day lock periods. Once the loan is locked there generally is little flexibility in adjusting that rate downward even if the overall rates change.
"Over the years I have had several buyers save by working with a loan officer who has access to the information and the experience to make good recommendations", says Dena Hoggard of H&L Realty Group in Dallas, Georgia. "I'm not sure how the new rules will affect people who have to choose to lock their loan rates so early in the process."
Although the new RESPA law changes do not specifically mention rate locking or floating the do restrict the way disclosures of rates and points are handled. As with many laws meant to protect a few who fail to understand simple details the unintended consequences, by all evidence, are far reaching and more damaging to the home buying public than expected.
The author, a seasoned mortgage banking veteran, can be reached for comment at 678-439-8683.
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