If you are concerned about mortgage interest rates read on! I would add something to this post, but it’s pretty clear what it is from the first sentence below and is a GREAT thing for you people out there in the market place that are house hunting. Make sure to ask your lender if they have the Lock And Shop Program. Richard Kemper – for all your Tampa real estate needs. Call me at 813-777-5332
Lenders revive ‘lock and shop’ programs
NEW YORK – Sept. 20, 2013 – Some lenders are bringing back “lock and shop” programs to help homebuyers lock in mortgage rates during their house hunt so they won’t need to fear rising rates.
Premier Nationwide Lending is the latest lender to announce it will now offer a “lock and shop” program. After approving a homebuyer for a loan, the company will agree to lock in their interest rate until they find a property to purchase. The homebuyer will then be protected against any mortgage rate increases while they look for a home. If rates move lower in that time, the homebuyer will have the option to float down to the lower rate.
“The threat of increasing interest rates stripping away a borrower’s loan approval is removed from the equation,” says John Hudson, Premier Nationwide Lending vice president of regulatory affairs.
The “lock and shop” program mostly vanished from lenders’ offerings when the market began to get more volatile, Andrew Weiss-Malik, 360 Mortgage COO, told HousingWire. Lenders are reviving the program to gain a competitive edge, he says.
“As the lending market becomes more competitive, some lenders are exploring riskier products to replenish declining loan volumes,” Weiss-Malik says.
One risk from such programs, experts note, are that “lock and shop” programs may prompt homebuyers to prolong their home search and place more risk upon the lender. There is no time limit given within the program, so home shoppers can lock in the rate as long as it takes to find a home.
Source: “Lender revives housing boom-era mortgage concept,” HousingWire (Sept. 17, 2013)