Question: Rates Have Dropped, But I Locked My Rate... What Are My Options?

Answer: You should speak to your broker or lender and have them evaulate the circumstances.

Your broker should have locked the rate at the lender that was providing the best rate at the time you requested the lock. This puts your your broker is a tough spot. The reason they were able to secure the original rate was a relationship with a lender. When the broker locks a loan, the lender secures the funds and counts on the loan closing. If the broker chooses to take the loan to a different lender or investor to secure a lower rate the relationship with the primary lender is strained. Most brokers resist moving the loan to another lender unless the reduction in rate is significant. Keep in mind that there was a reason they locked the loan with the initial lender and the reason was most likely that they provided the best rate. Even with a slight reduction in rate, the initial lender probably still has a more competitive rate than the broker's second or third choice for an investor. The evening news likes to report on the average mortgage rates and it makes for a good story but usually does little more than show the trend of the market. Your broker or lender should be able to discuss with you the current environment surrounding your particular market and help you decide the best time to lock your rate.

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