Rate Lock Policy

//Rate Lock Policy
Rate Lock Policy 2017-11-21T13:37:11+00:00

Rate Lock Policy

Meridian Home Mortgage Corporation's Rate Lock Policy is a major reason why we are able to offer such low mortgage interest rates. A loan is eligible for a rate lock once the appraisal is complete. It's important to understand why.

Our lending partners reward us with lower interest rates than our competitors partly because we are able to deliver the loans that we lock. The final home value can affect the loan approval and the rate. Waiting for the appraisal before locking ensures that we can continue to deliver a very high percentage of loans that we lock. The result is lower rates for all of our clients.

Once your appraisal is reviewed, you can either lock or float your rate:

Lock

  • Your mortgage interest rate will be locked – your loan must close and fund during the lock period
  • You are protected against negative market changes throughout the loan process
  • In most cases, your rate will be locked for 30 or 45 days depending on market conditions. 60 day locks are also available upon request

Float

  • Your mortgage interest rate will not be locked – no deadline or time frame for closing is mandated
  • Floating will leave your loan rate subject to market fluctuation
  • If rates drop and you decide to lock, you will benefit. If the rates increase, you will get the higher rate
  • Meridian Home Mortgage does not offer rate predictions or rate forecasting services

Rate Lock Extensions

  • Lock extensions are available on all loans
  • If the rate lock expires, you may be charged a rate lock extension fee. Generally, this fee is added to your loan and varies in amount
  • The cost of an extension depends on several factors including the length of the extension and current market conditions

Rate Lock Questions

Do I pay a fee to lock in my rate?

No. Meridian Home Mortgage will never ask for a rate lock fee or any other out-of-pocket fee before or during the loan process. If a lender asks for a rate lock fee, you should reconsider using them to obtain a mortgage. Fees like this are simply designed to increase their profit and lock you into the process. They are typically non-refundable.

Can I change my rate after it's locked?

Yes. However, your rate will be priced off of the same rate sheet as your original lock. For example, if your rate was locked on May 1st, all changes will be based on the May 1st rate sheet.

Can I choose a different program after my rate is locked?

Yes, usually you can choose a different program. Depending on the situation there may be limitations.

What if rates drop after I lock in my rate?

Both increases and decreases in interest rates will not affect your locked rate. However, if there is a dramatic change in your favor, there is a possibility that the rate can be renegotiated. The renegotiation fee can fluctuate depending on several factors.

How many times can my rate lock be extended?

Typically, your rate lock can be extended twice. In some cases, more extension can be granted.

Is it better to lock or float my rate?

This is an important decision and there is no uniform answer. Typically, if you like the payment, savings, and loan terms, Meridian Home Mortgage suggests that you lock in your rate to protect against increases. While there is always some sense of general direction with mortgage rates, no one can predict with any certainty where mortgage rates will be in the future.

Are there exceptions to when I can lock in my rate?

Yes, exceptions are made when circumstances call for it. It's important to understand that locking loans earlier in the process means that the rate needs to be locked for a longer period of time. This can result in higher cost to you.

Can I re-lock with a new rate after rate lock expires?

Yes, typically you are able to re-lock with a new rate after your rate lock expires.

However:

  • A certain period of time may need to pass after the lock expiration date (and all extension dates) before you can re-lock
  • You may be subject to worse-case pricing. This means that your new rate may be calculated off of the original rate lock sheet or from the current sheet, whichever is worse.
  • There might be a re-lock fee charged to you