What happens when a rate lock on a re-finance expires?

I applied for a re-finance and locked in a rate of 4.25 with a 30 day lock on 6-25-11. It has been 75 days and have not gotten a closing date yet. Was told rate lock was extended with no charge to me. Rates have dropped since original lock to 3.75. Should I get the lower rate?

Asked on September 5, 2011 under Real Estate Law, Illinois

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If your rate lock has been extended for the purchase or refinance, you need to find out how long the rate lock has been extended to. The rate lock for a loan is typically unilteral. Meaning, the lender is locked in on the loan's interest rate but you are free to go elsewhere for another loan.

With falling interest rates where you can obtain a loan at 3.75% it makes sense for you to try and lock in a rate below the 4.25% that you supposedly have locked in. If you have a mortgage broker assisting you on the loan, you should call him or her for direction on how to proceed to get a lower loan rate.

When a rate lock on a refinance expires you can no longer get that agreed upon stated rate of interest.

Good luck.

 

 


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