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April 15, 2007
rate lock points
Hi
I am looking into taking out a 30 yr fixed rate mortgage with HSBC. After reading the loan pre approval forms I found that they charge 1 point to lock the rate for 30 days. Does this sound reasonable?
thankyou
Comments
banks should not charge to lock, brokers will
definitely say "NO!" if they want your business,
Posted by: haterade at April 15, 2007 2:54 PM
I've financed a couple of houses, and refinanced multiple times with HSBC and never paid points to lock. it's usually something like 0 points = 60 dayy rate lock. then you can buy down the rate for about a point per 1/4 percent in the rate of the loan. are you sure it's right? talk to them and verify it. maybe it's because it's a pre approval and not an application? doesn't seem right. unless.....and I suppose this is a possibility.....unless they are expecting rates to move up sharply, which is certainly possible, given the recent move down in the dollar, which should push up the rate on the 10 year treasury, which is the basis for the rate on the 30 yr fixed.
Posted by: anon at April 15, 2007 3:53 PM
also doesn't sound right to me. i just locked in 60 days for no points (via a broker), then paid to buy down rate. the 30 day lock they offered was at a lower rate but i needed more flexibility.
Posted by: Anonymous at April 15, 2007 4:14 PM
Nope, you should get the 30-60 day lock automatically. After that time there will be a charge to keep the lock (maybe 1/8 or 1/4 point per week), if you haven't closed by then. But they shouldn't be adding points for a lock, regardless of whether you're using a mortgage broker.
Posted by: Anonymous at April 15, 2007 11:55 PM
sometimes they charge 1 point to lock in, but the point is refundable at closing.
see if this is the case.
Posted by: Anonymous at April 16, 2007 10:13 AM
Thanks for the info!
Posted by: op at April 16, 2007 11:59 AM
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