Lisa recently asked about mortgage locks and pre-sales in the forums:
I have bought a pre sale at Gallery. Their perfered mortgage company- Homestone, tells me that I do not want to lock in with a completion date so far out (projected July 2008) They allow 1 float down with in 60 days of closing. Mortgage Broker says that as the year goes on, mortgage rates will drop and I will not be able to float down – since it will be further than 2 months out. Was wondering other people’s thoughts. And also, if any one has worked with Homestone and what they think.
For my two new construction purchases I had the option to lock and didn’t. For the first one that turned out to be a fine decision, I didn’t go with the onsite lender and rates did drop. For the second one I should have locked because of this whole mortgage melt down mess.
The advice that has since been given to me is that what you should do is first find out how much it will cost if you break the lock and go with another vendor (I’ve found it to be between $200-$500) and then lock with them based on stated income (they tell me that you can go from stated income to full doc but you can’t go from full doc to stated income). Then no matter what happens you have something but if you find something better then pay your penalty and go with another lender.
But I’m sure some readers know way more about this than me…