Rate-lock expiration...can % float "down"??

[rafen4]

What is the name of your state?What is the name of your state? New York

We confirmed a 60-Day Rate Lock at 5.25% with our lender which is set to expire on 5/23.

Our closing is scheduled for 5/24.

I spoke with our lender and noted that the rates as of 5/16 (from his institution) were lower...5.00% and noted that upon expiration, if the current day's rate is lower, we benefit. We did not discuss taking any action.

I received yesterday a new Rate-Lock confirmation letter from our lender stating that the rate is 5.25% however the expiration date is now 5/27 (i.e., AFTER our closing). My first reaction is why would they extend if for no other reason than to keep this rate while the market rates are lower.

The lender's response: they charge a fee (1/4 point) to extend/re-issue a new rate lock and this fee off-set the fact that the current rate was 5.00% (or 1/4 point lower)...net-net a zero effect. The lender also explained that I can't benefit from lower rates and that there is no "float" down benefit to be had...that's the way it works, he explained.

Is this true? If I had let my 60 Day Rate Lock of 5.25% expire on 5/23 and the rates on 5/24 (closing day) were 5.00%, am I not entitled to that?

Please help before I offend our lender with my pre-supposed indignities at what I perceive to be a 'hustle'.

 

[HomeGuru]

What is the name of your state?What is the name of your state? New York

We confirmed a 60-Day Rate Lock at 5.25% with our lender which is set to expire on 5/23.

Our closing is scheduled for 5/24.

I spoke with our lender and noted that the rates as of 5/16 (from his institution) were lower...5.00% and noted that upon expiration, if the current day's rate is lower, we benefit. We did not discuss taking any action.

I received yesterday a new Rate-Lock confirmation letter from our lender stating that the rate is 5.25% however the expiration date is now 5/27 (i.e., AFTER our closing). My first reaction is why would they extend if for no other reason than to keep this rate while the market rates are lower.

The lender's response: they charge a fee (1/4 point) to extend/re-issue a new rate lock and this fee off-set the fact that the current rate was 5.00% (or 1/4 point lower)...net-net a zero effect. The lender also explained that I can't benefit from lower rates and that there is no "float" down benefit to be had...that's the way it works, he explained.

Is this true? If I had let my 60 Day Rate Lock of 5.25% expire on 5/23 and the rates on 5/24 (closing day) were 5.00%, am I not entitled to that?

Please help before I offend our lender with my pre-supposed indignities at what I perceive to be a 'hustle'.

**A: the lender is giving you a bunch of crap. While it is true there is a cost to re-lock, calculate 1/4 point vs. the .25% savings over the life of the loan.
If you are getting a 30 year mortgage, the quarter point savings over the life of the loan is substantial.

 

[seniorjudge]

What is the name of your state?What is the name of your state? New York

We confirmed a 60-Day Rate Lock at 5.25% with our lender which is set to expire on 5/23.

Our closing is scheduled for 5/24.

I spoke with our lender and noted that the rates as of 5/16 (from his institution) were lower...5.00% and noted that upon expiration, if the current day's rate is lower, we benefit. We did not discuss taking any action.

I received yesterday a new Rate-Lock confirmation letter from our lender stating that the rate is 5.25% however the expiration date is now 5/27 (i.e., AFTER our closing). My first reaction is why would they extend if for no other reason than to keep this rate while the market rates are lower.

The lender's response: they charge a fee (1/4 point) to extend/re-issue a new rate lock and this fee off-set the fact that the current rate was 5.00% (or 1/4 point lower)...net-net a zero effect. The lender also explained that I can't benefit from lower rates and that there is no "float" down benefit to be had...that's the way it works, he explained.

Is this true? If I had let my 60 Day Rate Lock of 5.25% expire on 5/23 and the rates on 5/24 (closing day) were 5.00%, am I not entitled to that?

Please help before I offend our lender with my pre-supposed indignities at what I perceive to be a 'hustle'.

You are right: this is a common hustle.

 

[HomeGuru]

You are right: this is a common hustle.

**A: I guess the lender can't calculate for beans or count beans for that matter. Net-net a zero effect? Total BS effect.

 

[You Are Guilty]

While I agree with the responses (i.e. a float down does exist), given those rates, I'd bet this isn't a 30-year mortgage. Either way, I doubt the loan would be short enough that a 1/4 point "fee" would be more than the extra payments during the life of the loan.

Yet another NY mortgage broker at work