The written lock confirmation

Below is the “Lock-in Confirmation” with a 4.375% rate and no points.  My clients moved their refi from Provident Bank Mortgage after they increased the 4.5% quoted rate to 4.75% while FNMA rates stayed the same.

The Confirmation states that “other closing costs and loan terms may be subject to change.”

While the title or recording fees could change, the fees charged by the lender and broker should stay the same.  One big issue (1/4 point) is whether you have impounds (no impounds for this loan) and we got everything else in writing.  I’ll try to get some more info about


  • This is an 80%  CASH-OUT refi with FICO middle scores between 720 and 739 and no impounds

The rate would be LOWER if we had 740+ middle FICO scores, agreed to impounds and didn’t have an 80% LTV CASH-OUT refi.

  • Note that if rates go DOWN, you will get the HIGHER locked rate.

Here we got a 30-day lock and if you want your rate to float, you can always wait to lock until you’re ready. In this case, we wanted to ensure we got the 4.375% rate with no points and no impounds.

  • The “reserved” rate at application is NOT a lock is playing the market with their “reserved” rate and they count on rates not increasing by very much during those 48 hours.  They quote with a large enough profit so that they’ll still make money on the loan even if rates go up.

And since the loan has to be APPROVED prior to locking, they usually have the option to require one more piece of paper to get approval — a good way to get the 48 hours to expire without approval and the “reserved” rate expires.

If the rates go down, you’ll get  the “reserved” rate unless you renegotiate and they’ll pocket the extra profit.  They will NOT automatically lower the rate to market.  You also CAN let the 48 hour reserved rate expire.  You can’t lose by reserving a rate as you are not committed, but they are (provided your loan is approved).  If you have time to play the market, that’s the place to go.  Make sure you have ALL your documentation ready so you can fax or email it right away.

I would prefer to NOT play games and instead deal with a broker who discloses his fees upfront and provides the wholesale rate sheet so the borrowers can make EDUCATED decisions.

  • You are NOT receiving the loan agent’s commission from

They did NOT provide the lowest quote, so don’t be deceived by their marketing.  We decided to go with them because they made a mistake during the initial quote (the rate would have been 4.5% if they hadn’t made a mistake).  They honored the initial quote, probably because they were aware that I was going to publish our experiences at this new blog.

The PDF:  Lock-in-confirmation-pub

Once you locked your loan, you’re almost there — provided that the property appraises and the lender doesn’t come up with NEW conditions and discovers previously overlooked problems.

Never spend your money before funding.

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