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Home Loans

If your lock expires before you can close on your loan, don’t panic! There are options available. We offer the ability to extend locked loans, or depending on your situation, letting the lock expire and entering into a new lock might be the best option. Your Home Loan Guide will go over all of these options with you, and help you choose the one that works best for you.

In most cases, once a mortgage rate is “locked” it cannot be unlocked, so it’s important to thoroughly understand your lender’s policies before locking your rate. One example of what’s usually a permissible rate change is when a borrower decides to change their loan type, and moves (for example) from a 30-year fixed rate loan to a 10-year adjustable rate. If this happens, the lock is technically broken and a new product-appropriate rate would be locked in its place.

Don’t be afraid to ask questions about rate locks! Your Home Loan Guide will be with you every step of the way to help you find the best scenario for you when it comes to products and pricing.

If the appraisal comes in lower than the asking price of a home, you have options. First, you can increase your down payment to make up for the difference in value vs. asking price. This may be beneficial if you’ve found your dream home, but be cautious about paying more for a home than what it’s worth. You can also use the low appraisal as a negotiating tool to see if the seller will lower their asking price. Lenders will not lend higher than the appraised value of the home, so if the appraisal comes in low, you may be in a good position to renegotiate.

Here are some of the most common factors to consider when pricing a home. (Or negotiating the price of a home!)

  1. Location
  2. Size
  3. Age
  4. Historical sale price
  5. The sale price of comparable homes in the area (known as “comps”)
  6. Condition – including the number and quality of updates and renovations
  7. The current housing market

Home loan rates are subject to change daily, and even multiple times a day in some cases. When you lock in your mortgage rate, you are saying “I choose the rate that’s in effect right now.” This can protect you from an increase in the rate between now and closing, but may also prevent you from getting a lower rate if interest rates drop before closing. It’s always a good idea to talk to our Home Loan Guides before locking in your rate.

To lock your rate, simply notify your Home Loan Guide that you’re ready to lock your rate, AND receive confirmation from him or her that the lock is complete. We will be happy to walk you through the locking process and the lock options available to you.

Your appraisal may look different depending on the type of property being appraised. Here are some samples provided by Fannie Mae for different home types:

  1. For a typical home (uniform residential)
  2. For a condominium (individual condo unit)
  3. For an income property (small residential income)

Points and credits are tools you can use to adjust your home loan rate up or down to suit your needs. “Taking credits” means accepting a higher interest rate on your loan in exchange for lower costs at closing. The opposite of taking credits is “paying points,” which involves paying more at the time of closing in exchange for a lower interest rate (and lower monthly payment).

When do these strategies make sense? Every buyer’s situation is unique, but one common scenario is that people who expect to refinance or sell their house within ten years often find it beneficial to take credits, while those who expect to stick with their home loan for the long haul can save money over time by paying points up front in exchange for a lower monthly payment.

At Solarity, our expert Home Loan Guides have your best interests at heart, and will help you explore your options and figure out what approach works best for you.

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