A rate lock protects the borrower from rising interest rates in the period between sales agreement execution and closing. If the buyer locks in a rate of 6%, they will only have to pay 6% interest even if rates rise while going through the loan application process. A rate lock is commonly good for 30, 45, or 60 days, though that time period can be shorter or longer. After that period expires, the buyer is no longer guaranteed the locked-in rate unless the lender agrees to extend it. Therefore, arranging a prompt closing is crucial. The loan officer must make time to explain the documents in detail and be of great service to the buyer. The loan officer has the obligation of knowing in detail and explaining the lender’s loan programs and requirements. That’s why, as a real estate agent, you don’t want to hand off your clients to just any old loan officer. Find the ones who will treat your client well and walk them carefully through the steps. It could mean the difference between your client saving thousands of dollars...or losing thousands of dollars.
PROCESSING: THE AP G: THE APPRAISAL
One of the most crucial steps in the lending process is the lender’s appraisal of the property. This is where the lender will determine whether or not the house is worth the amount of money they are going to lend to the borrower. Let me warn you up front: the appraisal process can be a wild ride. I actually run a value estimator to confirm the value of the property is in line with the borrower's offer. The lender orders the appraisal. It could take a week, two weeks, or even three to get the appraisal back depending on the lender
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