Oregon Mortgage Rates Lowest Oregon mortgage rates

What is a 'lockin'?

A period of days that a lender agrees to give you a certain interest rate for a certain fee if you can meet their requirements.

Is the 'lockin' a guarantee?

Sorry, NO! Except for certain circumstances, (consult an attorney for legal advice on the subject) the lender does not have to give the rate. The lender is usually not even obligated to close your loan at all. Of course it is VERY rare to have that happen. I have seen it happen when a lender loses a program, runs out of money or closes down.

Is there a FEE to lock in?

I have seen brokers advertise that they had no lockin fee, thus sounding like they were less expensive than the competitors. I have also seen brokers charge a separate fee to lockin a rate. There is really no 'lockin fee' in the mortage world but to clarify this you need to know how rates are priced.

Think of a lender as a large bakery. Think of the broker as a retail grocery store. Brokers get their loan programs from the wholesale lenders and then mark them up to make a profit much like a store would bread from a bakery. We have a certain 'cost', called 'points'. Each 1/8th (one-eighth) percent of rate difference changes the cost.

For example our 30 year fixed rate sheet may show rates from 6.000% to 8.000% percent. Lets say at 7.000% the lender makes exactly the profit they need, so they offer it to us at no 'cost'. That is called PAR pricing. If the borrower wants LESS than 7.000%, the lender starts to charge a 'discount fee' to keep their profit the same. Again to keep it simple lets say

7.000% is 'par',
6.875% costs 1/4(.25) point,
6.750% costs 1/2 point,
6.625% costs 3/4 point,

all for a 30 day lockin period.

You can see that as the rate goes DOWN, the 'points' go UP. One 'point' equals one percent of the loan amount.

That is how rates are priced, what about 'lockin' periods?

The lender has a cost that changes every day. To hold a certain amount of it for you for periods of time, they charge more to insure their yield. The longer the lock, the more the points charge. So, is there a 'fee' for locking in? Well its in pricing. If the 6.750% above was what you wanted with a 1/2 point for a 30 day period but you did not want to pay the points, you take the 7.000% with no points. There is no 'fee' -- you have paid a higher interest rate.

What lockin periods are available?

There are no legal set periods. They are usually up to the individual lender but the industry averages are:
9, 12, 15, 21, 27, 30, 45, 60 days with a few higher to replace long construction loans.

Do we have to lock in?

Only when the loan is (usually) ready to fund and close. If you think the market will hold or go down then you can wait and take a lower lockin price. This is called 'floating' the rate.

We have until (usually) 4:00 PM on weekdays to lock a loan. It is done by phone, fax or through the web depending on the lender.

How do we decide which lock period to take?

You can't take the locks shorter than 21 days unless your application is in and fully approved by the lender. For a 21 day lock we need to have your application to the lender within 2 to 5 days, and within 7 to 14 days for a 30 day lock, depending on the lender. If you are nervous about the future and wish to lock, some of the things to be considered are if its a purchase requiring time to close or a refinance for quickly needed cash, how busy the particular lender is and can they comply with their own lock periods, what type of loan program you want and the time needed for the documentation, etc. To just quote a certain lock price to a borrower without having these facts is not responsible.

What about rates quoted in advertising?

You must be careful about advertising and phone quotes! It is not illegal to advertise a 9 day lock price but it is not reasonable to expect to get it! Some publications try to establish guidelines for the broker/advertisers but the papers are not police and can only check so much.

How do we know we are locked in?

A responsible broker will obtain a verification from the lender that their lock has been placed. Most lenders verify that quickly but some do it the next business day. The only 100% sure way to know you are locked would be to see the verification form and be able to call the wholesale lender directly to verify the verification BUT they are wholesale and won't talk to you. A broker can block the lender information and show you the rest of the lock verification but bottom line is that it could be forged and is still no proof. You must work with someone you trust, and asking the broker for a written guarantee that they locked the loan would be a good idea.

Go to our 'APPLY NOW' page, then to the 'Ratelock' link to see our interesting lock-in form.