When the borrower is done shopping around and has decided which lender they would like to work with, they bring the loan estimate to the lending establishment and start the next step. Working with the real estate agent and lender’s loan officer, you sign all loan disclosures, the loan estimate, and signs off on an important document called the “intent to proceed.” The intent to proceed evidences that you are interested in moving forward with obtaining a loan from that particular lender. It does not commit the prospective buyer to get a loan from that lender. It simply states that you have signaled intent to proceed with the lender’s loan process under the terms described in the loan estimate. Think of the intent to proceed as someone raising their hand at an auction. It doesn’t mean they are going to buy, it just means they are interested in buying. It’s just that in this case, they have to sign something instead of simply raising their hand.
PROCESSING: RATE LOCK
Once that paperwork is done, in most cases the next step is for the lender’s licensed loan officer to lock in the rate. By that I mean that the loan officer commits that the lender will give the borrower a certain interest rate on the loan. The world of loans and mortgages is fast-paced, and interest rates can change at any time. A rate lock is important because it guarantees that a mortgage lender will give you a certain interest rate, at a certain price, for a specific time. Exactly when the lender locks in the rate is going to vary. Some lenders lock it in at this point, some wait until a later time in the process.
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