There was an old wholesale rep that used to call on Brian and I back in the day. His catchphrase was “Lock it, Doc it, Put some money in your pocket”. Our question today is, is this the motto you live by?
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Provide your client with your insight and expertise and let them make the decision to lock or float. It certainly make s the processing easier if you don’t have to add that extra layer of watching a floating rate.
THANK YOU for your commentary. NOTE: I am not “freaking out” at all because we all knew rates were going up AND the rates are still extremely low. I always tell my Borrowers that I do not have a crystal ball, yet, due to this or that, the Experts who track specific mortgage indicators (like Barry Habib) say rates will stay the same or will go up. I remind them again, the rates are extremely low currently, they change slightly all the time and I do not know exactly when they will go up significantly. They appreciate my honesty.
As to Locking a loan, especially with today’s litigious and challenging environment, one never knows IF: There will be a tiny glitch with an Appraisal and a special door will need to be ordered to create an actual room, which is a room, but without a door it is a loft; OR difficulty getting that Tax Return; OR a small “issue” on a Credit Report that does not seem important until the Lender looks at the file and wants the Borrower to contact an Ex-Spouse from 15 years ago and get the entire rent rolls for a year from a property your Borrower has not paid on for the past 15 years because it was “awarded” to the Ex-Spouse in the legal marriage Demand and the Borrower has not spoken to the Ex-Spouse for fifteen years and will not speak to the Ex-Spouse to get the information; OR a Borrower suddenly takes a quick business trip outside of the county right when you need one more tiny piece of documentation that is considered vital; OR the credit score dropped a few points just before the Lender pulled credit due to an unforeseen and/or forgotten item that the Borrower failed to think of; OR that wonderful Boyfriend who swore he would Co-Sign on your loan, fills out and signs all Disclosures, provides ALL documentation and just when we are ready to go to signing the loan decides to pull out because his Brother does not think it is a good idea OR…should I go on? Never do I lock a loan until I am almost entirely certain that all of the hurdles have been jumped over, the Appraisal comes out clean and the credit has been given a thorough going over by the Lender AND the Lender has received the VOE and the Tax Returns.
QUESTION: WHY would a LO/Broker lock a loan for 15 days or 30 days, only to have it fall off, miss the lock expiration date and cost the Borrower more money?!!? I must assume that those who lock loans right away have super easy loans with no hiccups and life is a peachy dream. I wish I had more loans that were so straightforward. Most of my loans have inherent challenges and the Borrowers come to me to “fix” things so they can get a loan!! Otherwise, they can drive over to Wells Fargo (by way of an example) and get a Teller/Loan Officer to do their loan super cheap…just saying…
I am not in the mortgage industry, so maybe I don’t understand what you are up against. We get people to take 10% private money all the time. Why, because anything else is more expensive. Rent is higher than buying even at a 10% mortgage. So does the guy want to sit around waste rent money for 2 or 3 years till he can qualify for a bank mortgage, or does he want to take owner financing and get in the house and start living and building a financial foundation.
If you are agonizing over a point or two in the future, you need a new perspective.