First experience: Waived finance contingency to land a condo. I felt like I had no choice as I was getting outbid on everything by buyers who were waiving everything. I was getting good numbers from my lender, I found a place that had been in the market for 45 days and made an offer at list, so I felt reasonably confident in not over extending myself. Except lo behold, after the offer is accepted and my earnest money is down, the lender offers me a full percentage point over what they had shown me previously. "The markets are unpredictable" they say and point at graphs and charts and their giant red disclaimer. The whole thing seems insane to me but I go ahead and sign. What choice do I have. Second experience: I'm about to refinance with a new lender. They show me a great rate. We discuss possibility of rate changing. Rate doesn't change at all for the 2 weeks that we are in discussion. The DAY before I'm ready to sign, "Oh my God, the markets are crazy", and now I have to shell out an extra $2k to land the same rate. Is this normal? Is this how financing a home purchase works? I know $2k isn't a lot of money when it comes to the cost of home ownership, but it's still $2k. Am I really powerless in the face of some whimsical Wizard of Oz named "the market". I consider myself pretty financially savvy, but I'm really flabbergasted as to how this is a normal process.
Lock the rate, always. Why are you gambling?
Change yr lender if the lender didn’t lock for you or discussed when to lock
Name and shame the lenders. I had the same experience with Bank of America even after rate lock. Refi with Better.com and the experience is definitely better
We had the same experience with Wells Fargo and pulled out last minute to go with USBank who was honest/straightforward from the beginning. Find a good lender who you trust, but yes, if they're dishonest, this kind of thing happens. Make sure to shop around and have multiple options (similar to buying a car and playing different dealerships against each other); that way, if someone does this, you can easily take your business elsewhere. When we told Wells we were switching, they suddenly and miraculously were able to match USBank's rate even though that morning, they claimed the market just changed and this random fee got added and other bs. But they lost our business by being untrustworthy even though we could've gone lower with them with the relationship discount (but who knew if we agreed to go with them, the next day another unexplainable fee would get added again...)
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You need to lock the rate, so you won't be surprised when the rates go up. Usually the lock stays between 3-45 days (depending on the lender).
Absolutely. What is just suspicious to me is that when I've been ready to lock the rate both times, the rate has gone up each time.
It's business. If they see you in need without any other options, they will try to milk you. Just like any other business. After your first experience, you should have learned about the lock already. It's not about right and wrong, it's about playing the game safely.