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Wednesday, September 11, 2002 Locked-in mortgage rate may have flex
Are you one of the thousands of homeowners whose once-great locked-in rate looks high these days, as mortgage rates continue to drop? Don't assume that you're stuck with that locked-in rate. Once upon a time a borrower made the best possible deal with a lender, got a rate locked-in for a specific period of time, and then either benefited if rates went higher, or suffered when rates sank. Those days are gone. "Mortgage rates are at the lowest they've been in decades," said Richard Roll, president of the American Homeowners Association (AHA). "It's worth asking your lender to renegotiate your locked-in rate before automatically looking for another lender." This flexibility is a new wrinkle in the competitive arena of mortgage lending.And it's one that benefits homeowners. In the past a mortgage lender would be likely to turn a cold shoulder to a homeowner's request for a locked-in rate change. Today, lenders realize that borrowers are willing to walk away, and so are more open to offer a better rate rather than lose a customer. Don't expect your lender to approach you with a rate reduction offer, however. You will have to take the initiative. The best way to go about requesting a lock-in rate reduction is to first check out your alternatives. Then talk to your lender. If your lender is willing to renegotiate to an acceptably lower rate it will save time, paperwork, and also protect any fees you have previously paid to your current lender that would probably be lost if you transfer your loan. On the other hand, if your current lender's best rate reduction offer still comes up short after you've factored in all of the hidden costs and losses associated with a refinance take full advantage of your refinance options.
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