Slower Loan Processing Expiring More Rate Locks
Slower Loan Processing Expiring More Rate Locks
Slower Loan Processing Expiring More Rate Locks
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January 14, 2011 (Shirley Allen)
shaking-hands-image
As rates have risen, the number home buyers seeking a rate lock on their mortgage loan application has increased, but new rules and regulations are increasing the amount of time it takes to finish processing their loan, and borrowers are facing the prospect of higher mortgage rates or increased loan costs for a rate lock extension.

According to J. D. Power and Associates, in 2010, the average mortgage took 52.1 days to close, up from 46.9 in 2009, the year the new regulations took effect.

As a result, an increasing number of borrowers who elected to lock in their rates at the end of last year but did not close on time must now arrange extensions of their lock-in agreements. Lenders and mortgage brokers say these lock-in agreements have been complicated by changes in the Truth in Lending Act, which add more protection for consumers but also lengthen the loan-application process.

Of course, a number of other factors can also impede a closing, especially considering the industry’s tighter lending requirements. These range from lower credit scores, to delays in securing appraisal, to incomplete submission of documents verifying income. The most common rate locks are 30 to 60 days.

Borrowers often can arrange for an extension of their lock-in agreement, although they might have to pay extension fees. Most mortgage brokers do not charge money to extend a lock-in agreement, but some borrowers who deal directly with lenders may have to pay anywhere from 0.10 to 0.25 for a percentage point of the loan amount for a 15-week extension (e.g. $400,000 loan could mean $400-$1,000 in fees).

Irene Amato, the owner of the A.S.A.P. Mortgage Corporation in Cortlandt Manor, N.Y., recommended that borrowers take out a lock for 60 to 90 days, especially for a refinancing, which she said, could take a little longer than a home purchase because of a backlog of applications.

And remember, if your credit score plummets after you’ve signed a rate lock, lenders in some cases might rescind the lock. And some rate locks have buried in their fine print a caveat that a rate can in fact rise a quarter of a percentage point or so and still be considered applicable to the borrower.

Experts also recommend having a real estate attorney review any lock-in agreement, since the agreements can differ greatly among lenders.

Tags: rate lock, mortgage rates, mortgage borrowers, mortgage loans, loan application, mortgage brokers, lenders, loan-application process, truth in lending act

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WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
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NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
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No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools
Mortgage
Calculator

Estimate your monthly mortgage payment
Auto Loan
Calculator

Determine how much car you can afford before buying
Learn About
Mortgage Loans

Learn about the different types of home loans
15 Year vs 30 Year
Loan Comparison

Compare 15 year and 30 year mortgage loans
Todays Mortgage
Rates

See today's mortgage rates. Shop, compare and save.

January 14, 2011 (Shirley Allen)
shaking-hands-image
As rates have risen, the number home buyers seeking a rate lock on their mortgage loan application has increased, but new rules and regulations are increasing the amount of time it takes to finish processing their loan, and borrowers are facing the prospect of higher mortgage rates or increased loan costs for a rate lock extension.

According to J. D. Power and Associates, in 2010, the average mortgage took 52.1 days to close, up from 46.9 in 2009, the year the new regulations took effect.

As a result, an increasing number of borrowers who elected to lock in their rates at the end of last year but did not close on time must now arrange extensions of their lock-in agreements. Lenders and mortgage brokers say these lock-in agreements have been complicated by changes in the Truth in Lending Act, which add more protection for consumers but also lengthen the loan-application process.

Of course, a number of other factors can also impede a closing, especially considering the industry’s tighter lending requirements. These range from lower credit scores, to delays in securing appraisal, to incomplete submission of documents verifying income. The most common rate locks are 30 to 60 days.

Borrowers often can arrange for an extension of their lock-in agreement, although they might have to pay extension fees. Most mortgage brokers do not charge money to extend a lock-in agreement, but some borrowers who deal directly with lenders may have to pay anywhere from 0.10 to 0.25 for a percentage point of the loan amount for a 15-week extension (e.g. $400,000 loan could mean $400-$1,000 in fees).

Irene Amato, the owner of the A.S.A.P. Mortgage Corporation in Cortlandt Manor, N.Y., recommended that borrowers take out a lock for 60 to 90 days, especially for a refinancing, which she said, could take a little longer than a home purchase because of a backlog of applications.

And remember, if your credit score plummets after you’ve signed a rate lock, lenders in some cases might rescind the lock. And some rate locks have buried in their fine print a caveat that a rate can in fact rise a quarter of a percentage point or so and still be considered applicable to the borrower.

Experts also recommend having a real estate attorney review any lock-in agreement, since the agreements can differ greatly among lenders.

Tags: rate lock, mortgage rates, mortgage borrowers, mortgage loans, loan application, mortgage brokers, lenders, loan-application process, truth in lending act

FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
HOW LOANRATENETWORK
LOAN CENTER WORKS
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.
Helpful Tools

January 14, 2011 (Shirley Allen)
shaking-hands-image
As rates have risen, the number home buyers seeking a rate lock on their mortgage loan application has increased, but new rules and regulations are increasing the amount of time it takes to finish processing their loan, and borrowers are facing the prospect of higher mortgage rates or increased loan costs for a rate lock extension.

According to J. D. Power and Associates, in 2010, the average mortgage took 52.1 days to close, up from 46.9 in 2009, the year the new regulations took effect.

As a result, an increasing number of borrowers who elected to lock in their rates at the end of last year but did not close on time must now arrange extensions of their lock-in agreements. Lenders and mortgage brokers say these lock-in agreements have been complicated by changes in the Truth in Lending Act, which add more protection for consumers but also lengthen the loan-application process.

Of course, a number of other factors can also impede a closing, especially considering the industry’s tighter lending requirements. These range from lower credit scores, to delays in securing appraisal, to incomplete submission of documents verifying income. The most common rate locks are 30 to 60 days.

Borrowers often can arrange for an extension of their lock-in agreement, although they might have to pay extension fees. Most mortgage brokers do not charge money to extend a lock-in agreement, but some borrowers who deal directly with lenders may have to pay anywhere from 0.10 to 0.25 for a percentage point of the loan amount for a 15-week extension (e.g. $400,000 loan could mean $400-$1,000 in fees).

Irene Amato, the owner of the A.S.A.P. Mortgage Corporation in Cortlandt Manor, N.Y., recommended that borrowers take out a lock for 60 to 90 days, especially for a refinancing, which she said, could take a little longer than a home purchase because of a backlog of applications.

And remember, if your credit score plummets after you’ve signed a rate lock, lenders in some cases might rescind the lock. And some rate locks have buried in their fine print a caveat that a rate can in fact rise a quarter of a percentage point or so and still be considered applicable to the borrower.

Experts also recommend having a real estate attorney review any lock-in agreement, since the agreements can differ greatly among lenders.

Tags: rate lock, mortgage rates, mortgage borrowers, mortgage loans, loan application, mortgage brokers, lenders, loan-application process, truth in lending act

HOW LOANRATENETWORK
LOAN CENTER WORKS
FILL OUT THE FORM
It all starts here. Select the loan product you want to apply for and complete the subsequent questionnaire.
WE VERIFY & TRANSMIT TO LENDERS
Once we receive your completed questionnaire we verify a couple vital pieces of information and direct your information to our network of lenders, all within minutes.
REVIEW YOUR OFFERS
With offers in hand you can now compare rates and costs and get the best possible deal. Comparison shopping made easy. You fill out one form and lenders compete for your business.
CHOOSE YOUR LENDER
Congratulations! With the great learning tools we provide for you at LoanRateNetwork and the offers you have received, you've found the right product and the best rate.
ADVANTAGES OF USING
LOANRATENETWORK
FAST & EASY. DATA ENCRYPTED
Applying to multiple lenders is fast and easy with our one simple questionnaire. Choose the product you’re looking for, take a few moments to answer a few questions and you’re on your way to saving.
NO OBLIGATION. NO HIDDEN FEES
Any of the services on our website are 100% free, there is no obligation to use our services or any hidden fees. We’re not loan brokers so we don’t charge broker fees like other websites.
NO SSN OR CREDIT
CHECK
No SSN or credit check is necessary to use our services. We bring lenders to you so they can compete for your business and you save. That information only becomes necessary after you choose a lender.