October 28, 2020 at 1:04 am #72443pineapple76Participant
Our loan estimate paper work which was issued on 10/22/20 shows that we have an interest rate of 2.500%.
It states at the top of the document that the rate is not locked.
Today on NACA’s website the interest rate is 2.125%
If I ask my counselor, do you think that we can get the lower interest rate without causing a hiccup in the process?
We do not want to pull out of the deal and sign a new contract.
Thank you for your help.October 28, 2020 at 5:30 pm #72447mad8475Participant
I saw this today as well. Would we need to apply again? If we haven’t been approved for credit access yet does that mean we get the lower interest rate?October 28, 2020 at 5:49 pm #72448NelsontMember
You can’t ask for a new rate. Your rate is locked at credit access. If a lower rate appears before your first credit access appointment then don’t worry you don’t need to do anything. The ONLY downside to rate locking as I see it is the rate drops significantly while you are still in underwriting. The benefit of course is that your rate will never go up which is actually a common practice of predatory lenders. You might sign up for 2.5% and at the closing table they say it’s 4%. Not with a rate lock.
For what it’s worth putting the current drop in the rate into perspective comes out to only about a $30 per month difference.October 28, 2020 at 9:42 pm #72449BigHouseParticipant
With all due respect to the previous responses, this is what TTrumble said 3/14/20 on a similar question:
“The rate is locked in on the day that your Purchase and Sale Agreement is received by NACA. Since receiving the P&S automatically triggers that Loan Estimate to be generated, the two are one and the same where rate lock is concerned.
The rate lock is valid for ninety days and must be regenerated with a new Loan Estimate. It may have a different rate than the original LE.
The opportunity to buy the rate down even further exists up to the point at which the bank app is submitted. No changes of any kind can be made after that point.”
I too had this same question with my MC last night at my Credit Access meeting. The new rate showed yesterday and I thought that was the rate I was getting since my Loan Estimate said my rate was not locked. She told me the rate was locked in when I went into contract. So I did not get the lower rate that was in effect the date of my Credit Access appointment.October 29, 2020 at 5:45 pm #72473Peapod0609Member
I think at the Credit Access stage your “final” rate may not be locked because it may or may not take into account grants or interest buydown from you or the seller at that point. By the time you get to the bank app your rate will be finalized and can’t go up or down for any reason without restarting parts of the process (like signing a new contract and going through Credit Access all over again).
I like to think of it as your “base” rate is locked, and won’t change anymore based on the daily market rate you see on the website. In other words, your starting rate is good to go, and can only get lower if you apply more interest buydown or get a grant or something like that.
Hope that helps!October 29, 2020 at 5:58 pm #72474TTrumbleMember
The simplest way to explain this is to note that if it were not required by law, the LE would probably not be generated for NACA loans because we operate with such different parameters than a “regular” loan.
The rate was in fact locked when we received your P&S Agreement.
Online Operations, NACANovember 8, 2020 at 2:21 am #72560frankysmomMember
@ttrumble Hello, regarding your comment about the estimate having to be regenerated at the 90 day mark, I assume, if one still has yet to close. At what point does this 90 day clock, if I may, stop clicking? If you’re at day 85 with a CTC, is it policy to regenerate even though closing is right around the corner? Won’t that delay the process ?
Thank youNovember 9, 2020 at 9:51 am #72573TTrumbleMember
You have the CTC. It’s a done deal. Nothing will change.
Online Operations, NACA
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