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Mortgage Rate

I am a first time home buyer and I am supposed to close on a house on April 28th. I do  not have a rate locked in at this time, and I worry that rates may sky rocket last minute. Also, my mortgage guy told me if my credit score got to a certain number he could get me under 5 but close to 5. Yet, all the paper work for pre approval says 5.375. Is it likely that on the day we try and lock a rate he will try to give us the higher rate?
Thank you
  • March 08 2011 - Norton
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Answers (5)

You can lock your loan at any time, and the loan officer cannot prevent you from doing that.  You may want to have the discussion with your loan officer again as rates can change daily, even thru the day.  If you are concerned with your loan officers response, you may want to check with his/her supervisor
  • April 25 2011
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qualifying you at the higher rate just insures that so long as rates dont get above that level, your approval stands firm.  there are a number of things you can do to help your score in the short term, such as limiting inquiries and paying down smaller revolving accounts to below a 30% balance. Locking your rate is ultimately your decision.  Until you reach that point, each of us understands that the borrower has the right to shop for the best option available to them.  I dont think the lender is being devious, just cautious since if you do not reach that threshold score, your pricing would be based on what you currently have.  Good luck, and Congrats on finding a house!
  • March 08 2011
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The loan level pricing adjustments that fannie mae and freddie mac charge are very expensive for borrowers with lower credit scores.  Loan level price adjustments are based on assumed risk and are based on a tier system that places emphasis on credit score and loan to value. 

If you want the community to assist in determining whether the rate you've been quoted is fair you would need to provide more information.

What type of loan are you doing?  (VA, FHA, Conv)
What is the loan amount?
What state are you in?
What is your current middle credit score?
What is the Loan to Value

It is certainly possible that raising your credit score could improve your rate .375% but the market is volatile & rates have been trending up.

Most lenders will allow you to lock pricing for a specific day (to protect yourself) and once your credit is "rescored" will give you the correct pricing based on your improved credit score.

You need to ask the lender what specifically needs to be done in order to rapid rescore your credit and make sure they are following the market diligently if you're currently floating.

Good luck with your purchase and I hope everything works out.
  • March 08 2011
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Finny..What are the perameters of your loan and FICO score as it stands right now.
  • March 08 2011
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Until you lock you are at the mercy of the market and who knows where rates will go over the next 50 days. 

If you trust your loan officer you should be fine and based on the fact that you are asking this question I am guessing maybe you don't?  A good loan officer is in the business for the long haul so they will not jeapordize their reputation over one loan.
  • March 08 2011
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