If possible, speak to the mortgage representative who originally took your application. Banks are built on relationships and, in many cases, will be willing to accommodate both long-time loyal customers and potentially strong new clients.
Explain to the bank rep that you want to extend the rate-lock period on your refinance. If the bank insists on a fee, attempt to negotiate. The bank may be willing to waive or reduce fees based on deposit relationships, future lending opportunities or even the prospect of losing your business to a competitor. Whatever approach you take, be cordial and professional in your interactions.
If the bank is adamant on not continuing the rate lock or charging a fee to do so, consider refinancing elsewhere. Even if the rates have increased at the original bank, you may find a lower rate at another financial institution. If the new bank is eager for new business, it may offer attractive rates and reduced fees.
In some cases, the original bank may become more receptive once it realizes the threat of your losing your business is becoming a reality. Carl Carabelli has been writing in various capacities for more than 15 years. Save my name, email, and website in this browser for the next time I comment.
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Consider these key points about rate locks, and how you can use a lock to your advantage. A rate lock is a guarantee that a mortgage lender will honor a specific interest rate at a specific cost for a set period. The benefit of a mortgage rate lock is that it protects you from market fluctuations.
For example, if your lender locks in your rate at 3. Lenders usually charge an additional fee for extending the term of the rate lock period, however, so ask about what to expect if you need to extend the lock. It depends on the mortgage lender. Some lenders offer a mortgage rate lock once the borrower is preapproved with just an address of a prospective home. If you lock too early, however, you might end up exceeding the expiration date and facing extension fees or a new rate.
Also, keep in mind that the lender can void a rate lock if certain items on your credit report or mortgage application change between the time of your agreement and final underwriting. The sweet spot is the optimal combination of the interest rate, term and costs. Ask about the rates for several lock periods: 30, 45 or 60 days. Any term longer than 60 days gets pricey, so it might be smarter to wait until you get closer to the closing and check again.
The answer depends on your mortgage lender. While and day rate locks are the norm, you might be able to find significantly longer options that stretch closer to a full year. Of course, you might have to pay a higher fee for a longer lock.
In some cases, that can be an easily justified cost, though.
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