Interest Rates and Locking
We make money when your loan funds with our wholesale lending partner. We are paid by the lender.
Every home loan has some closing costs. The closing costs can be offset with a lender credit. A lender credit is when you select an interest rate above the PAR rate.
Why do interest rates and costs from company to company?
Interest rates vary from broker to broker, direct lender to direct lender and bank to bank. The market (price of MBS bonds) sets the interest rate baseline. Companies then adjust the rates to make a profit. Each company will mark up the interest based on the overhead and profit desired.
How and when may I lock?
Some clients lock the same day we review their loan application. You may lock your loan anytime after you have completed your loan application, reviewed your credit and financial documents. There is no fee assessed to lock. We do not need an appraisal to lock.
Do you charge points?
You choose your rate and costs. If you choose a loan above par, you may have a lender credit to pay for closing costs. If you choose a loan below par, then you may have a buy-down or discount point. We will give you both options.
What happens if rates go down after we lock?
If rates go down, we may have an option to do a float-down. Not available with all our wholesale lending partners.
What is the secondary mortgage market?
Most mortgages are sold into the secondary mortgage market. They are packed into either a Mortgage Backed Security (MBS), Asset Backed Security (ABS), Collateralized Mortgage Obligation (CMO) orf Collateralized Debt Obligation (CDO).