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Locking in Your Home Loan

Starting to shop for a home loan can be disappointing and lead to many pitfalls. Lenders will not commit to the prices they quote to shopping borrowers, so they are forced to select loan providers without knowing the exact price that they will pay.

There are a few reasons why quoted prices are subjected to revision by lenders. Locking in a price can be costly to lenders so they won’t until; they have enough information about the borrower to be reasonably sure that the borrower qualifies and that the price quoted is the correct price and there is a significant probability that the borrower will go to closing.

There are two reasons why the quoted price from a lender can be wrong. One, that the information provided by the borrower is not correct. For example, a credit score of 740 versus a credit score of 710, a 30 point difference, can raise or lower the price of the mortgage. Second, the market. The market changes every day, therefore, lenders reset prices every morning or sometimes change them during the day.  To read more of this story

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November 12, 2012 - Posted by | Uncategorized | , , , ,

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