Getting a loan in a changing market
How to keep your approval when your loan option is discontinued
by Josh Leake, Guest Contributor
You have a great rate and the perfect loan ready to close. Suddenly, you don’t qualify any more because the program is not available. What happened? Is there any protection or insurance to save the day? Many lenders have gone out of business recently. Even big names like Countrywide, Washington Mutual don’t offer any protection against closure. So what are you supposed to do?
One common item shines amongst all of the failing lenders and programs; lock your rate in. That’s right, even if you had a mortgage with Countrywide; if you had your rate locked before their announcement of reducing programs or closure, they will still honor the commitment. A few years ago, a few lenders went out of business that didn’t honor their commitments; but with bank bailouts and purchases by other lenders, they are required to honor commitments. And your rate lock is a program and time period commitment. So next time you are looking to purchase a property or refinance your mortgage, set yourself up a security blanket and lock your rate.
If you are working with a mortgage professional, they should be offering you free float downs if rates lower during your transaction. So really is there a downside to locking? Not in my opinion.
Contact: Josh is a Senior Mortgage Consultant (OR LICENSE #ML-3328, WA LOAN ORIGINATOR #510-LO-27544) with Plum Tree Mortgage Inc. Josh can be reached at www.joshleake.com
