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Q about mortgage loan
We are building our home and from the start were offered to use their lender which would give us some incentives so we went ahead with them. We were pre approved and have just been waiting for the house to finish being built. We have less than 2 months to go. In the beginning I'd asked about locking into that date's interest rate but he said we'd do that 30 days prior to closing and I thought nothing of it. But with the numbers going up (and down some) I'm getting a little on edge. I asked him again the other day and he insists we keep waiting till closer to closing. Is this standard? I know ultimately up to us but I'm starting to wonder if he's not looking for our best interest. Or is he? Should he be telling us to lock now? I'm new to this and am trying to learn but am now wondering. Which leads to my next question. Should I start calling different lenders to compare with this lender? And last, since the time of our pre approval our debt to income has changed significantly. Will this be looked at again and recalculated for the final loan or will they go with what info we gave at pre approval time?
Thanks for any info.
Re: Q about mortgage loan
Our lender offers a 60 day lock and if our home isn't finished by that date than someone(either us or the builder) will have to pay to extend our lock and it's pretty pricey. Your lender may only offer a 30 day lock so that is why he is telling you to wait. Doesn't seem sketchy but you should ask for how long his rate lock is guaranteed.
Should you decide to call other lenders they will run a hard inquiry on your credit. I would research and only have 1-2 more lenders run your numbers because hard inquiries can affect your credit score which directly affects your loan approval.
Lastly, you should not be applying for our charging anything on credit at this time. They can and likely will be keeping an eye on your credit and absolutely will not approve you for a loan if you a charging a lot. To them, this looks like you will not be able to afford your home. How "significant" are you talking? This could be a deal breaker for them.
Thanks for your reply. Great points I hadn't thought about. As for the significant change in debt, fortunately It's for the better. We've had an income increase and have paid off a huge chunk of credit card debt since. One of the plusses of living with my parents for 6 months while the house is being built
And if you don't mind me asking, what did you all decide to do? Lock in further out or did you all wait?
When we applied for our loan, we locked in for 90 days, until 8/7 (we close 8/1) in order to get the 3.5% interest rate. If you go past that date, then you lose that locked in rate. We were advised by our mortgage broker to lock in at the date of application.
From what I've seen the interest rates are only going to continue to go up. My advise.....lock in asap.
We locked in early as the interest rates are only going up. Our lock-in rate ends on September 6th as that was easily within the estimate that our builders gave us. Our lender told us if for some reason our house isn't finished by that date then we should ask the builders to pay for an extension. We are really hoping that it doesn't come to that.
That's great news about the pay increase and paying off the debt!