Profile picture for sriramonly

can loan term be changed without violating rate lock?

I live in washington state and locked in the interest rate with a credit union for a 15 year term. the loan is not yet closed and i wish to change the term to 30 years (with corresponding rate on the rate sheet for the day of lockin). My loan officer says i will be violating the rate lock if i change the term. But my friends and coworkers are saying that this is never the case as long as i stick to the rate sheet of that day, switching between loan terms should not matter.
I am not sure which version is the right one...
  • December 14 2009 - Bellevue
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Answers (4)

Profile picture for nwhome.us
Short of knowing the answer:
Have you read the terms of the agreement?
What do they say?
Real Estate 101: if it isn't in writing, it doesn't exist.
Your lender should be able and willing to show you the language on paper.
  • December 14 2009
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Some Lenders have a policy of "same day" ratesheet protection and others have "worse case" pricing wherein the borrower/broker takes the worse of the 2 days... when there is a change.  This policy comes from the Lender and not the originator in the case of using a Broker of sorts.  Example:  EverBank uses sameday as a policy for example. Your LO should be able to provide confirmation about the policy.  Unfortunately, watercooler talk only adds to the anxiety of it all.  Good luck and I hope all works out.  Happy Holidays
  • December 15 2009
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In most cases lenders will not allow you to change the term of the loan and use the rate sheet of the day when you locked in @ 15 years.  Usually the lender will take the worse case pricing between the rate sheet you locked in at and today's rate sheet to provide you with a 30 yr fixed rate.

Your loan officer is correct she cannot change the terms because it does violate the rate lock and this is standard with alot of the lenders. 

I agree with Martin when it comes asking to for their rate lock disclosure because this will give you what the terms of the rate lock are. 

I do not know how long you have had your rate locked but rates haven't changed much in the past 60 days so you might not be too bad off on getting a 30 yr fixed interest rate.

Good Luck.
  • December 15 2009
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As mentioned in these posts, depends on the lender.  Our policy is that you can go back to the rate sheet of the day and change the product for a slight cost, but not every lender is like that. 
  • March 17 2011
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