Mortgage Refinance question?

[jbauer]

So I am attempting to refinance my home mortgage. We "locked" in the rate of 3.625% earlier this week. Its now around 3.5%, so an 1/8 of a point . I've not signed anything yet. That locks anything in yet.

Any opinions on whether I can ask them for the new lower rates of today? Or anyone who's in the business know any of the issues with not continuing on?

 

[Zippyjuan]

Maybe this info will help: http://thefinancebuff.com/mortgage-refinance-what-if-rate-drops-after-you-lock.html

Or: http://www.bankrate.com/finance/mortgages/questions-rate-lock-answered.aspx

A rate lock protects the borrower from rate fluctuations for the duration of the lock period. If market rates rise after the rate is locked, the borrower will still get the lower rate, to the lender's detriment. But there's a downside: If rates fall after the rate is locked, the borrower might not be able to take advantage of that opportunity.

How much does a rate lock cost?

Borrowers are often told there's no charge for a rate lock. That's true in the sense that the rate lock isn't associated with a fee. But a rate lock isn't free. Rather, a longer rate lock typically involves a higher interest rate, which is more expensive for the borrower. The interest rate, or "pricing," difference between a 15-day rate lock and 60-day rate lock might be as little as one-eighth or as much as one-half of a percentage point, Thompson explains.

The difference isn't much so maybe just keep what you have? Sounds like it is basically up to your lender.

 

[NACBA]

Good info can be found here

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/sfhrestc

And you have 3 days to Rescind the Mortgage once you sign it

 

[jbauer]

I've got my paperwork here. I've not signed the rate lock. Its good for 40 days and must be signed within "na" days. I don't want to weasel out of anything, I'm just curious since we've sat on this paperwork....haven't had time to really look at it, just wondering if anything could changes.

1/8 of point doesn't sound like much but its $7k over 30yrs.

 

[NACBA]

I get that.

Be sure to scrutinize all costs in the 800 level of the GFE or HUD-1--that is the area where bankers and brokers screw homeowners.

 

[matt_]

It probably depends on your lender on what they will offer you. It sounds like you don't have a contract signed and haven't put any good faith money down, so you could probably walk away.

Years ago I refinanced a house and the opposite thing happened. Rates started rising after I had the lock. My credit union stopped returning my calls. It was clear to me that they were trying to hold out until the lock expired and give me a higher rate. I talked with someone in the family who gave me legal advice. He told me that I had no contract and no real recourse. He suggested I go in and threaten to complain to NCUA (the credit union regulatory agency) and the state AG office. I did that and got the paperwork signed that day with an apology from the manager. It was a case of big government working in my favor.