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Can I back out of an interest lock? My lender does not want to work with me after the rates dropped.

 
  • June 23 2012 - Austin
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Answers (9)

If this is for a home purchase, you will also want to take into account the terms of the purchase contract you entered into.  If pulling your loan from one lender and going with another lender causes your settlement to be delayed past the date in the contract, you may lose the home you have under contract and you may also be liable to the seller for damages.
  • June 25 2012
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Profile picture for Go Huskers
Be very careful of those people who come in after the fact claiming to have "float downs." Nothing is free so if a lender offers a one time float down, you can rest assured that it's already priced into their rate sheet. If someone is offering a float you would, in 99% of the cases, be better off finding a better rate with someone who actually knows how to manage a pipeline and lock for the amount of time you need; the end result will be lower fees and/or a better rate for you. 

Don't be fooled by hype and "float down" is the biggest hype in the mortgage industry!
  • June 24 2012
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You can always walk away and go with another lender.  I primarily use a lender that allows a free one time float down so this does not happen.  If you start over with another lender you will need to pay for a new appraisal in just about all cases.  I would see if you can speak with somebody who can possibly help you before you actually pull your loan.  They may just be able to do something but many lenders will not.

Best of luck to you.
  • June 24 2012
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Profile picture for user824376
great answers! thx
  • June 23 2012
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Yes. You can back out of a lock.
But that lender will not be interested doing your loan. You will have to go elsewhere.
New appraisal, ect.

Good luck!
  • June 23 2012
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What is locked rate vs rate you think you should get? What is the benefit re monthly payment of what you think another lender is offering? Would closing cost be lower adding a second appraisal fee? How much longer will closing take? Do you fit qualifying criteria of other lender? If refinance, how much is another months of interest going to cost you at your current rate vs closing now at locked rate?
I would be surprised if cancelling a lock is to your benefit...........
  • June 23 2012
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I've noticed Bank of Oklahoma is advertising a sliding lock, which stays locked if rates go higher but lowers if rates lower.

  • June 23 2012
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Profile picture for daveskow
flip the roles ....if you lock and committed to a rate with a lender  and if rates then went up ....and if  lender  came to you and asked yoo/ forced you to take higher rate...how would you feel ?

were you asked  if you wanted to LOCK intially ?  If so - did you commit to the rate the lender is still able to offer you?   if you didnt - I would say find another lender .....if you did- I would say honor the lock
  • June 23 2012
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Profile picture for zzroad101
Lenders have to hedge the locks that they take so they don't like to lower the rate once locked. If you get a GFE from another lender they may be more willing to work with you but if the appraisal has been done you might have to get a new one at your cost.
  • June 23 2012
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