FHA mortgage lenders must follow certain rules when advertising their FHA mortgage rates. Long ago, to avoid deceptive ads, lenders had to comply with Truth in Lending laws, which require lenders to display more than just an interest rate. Yet once they do comply, those advertised rates may be of no use to you. At least, not until you’re in a position to lock that rate you see.
An interest rate lock for an FHA loan in greater Houston is a pledge from the lender your selected interest rate won’t change during a specified period of time. This period is the length of your lock. FHA lenders won’t lock in your rate without your specific direction and until you lock, your interest rate is subject to the whims of the market.
FHA lenders aren’t required to follow any universal rule regarding locks, each may have its own policy but they are required to tell you what those policies are. Upon application, among the host of paperwork you’ll receive is an Interest Rate Lock Agreement which spells out when and how you can lock in your rate. Don’t expect to find an awesome rate on the internet and place a call to the mortgage company requesting a lock. Lenders will at minimum accept a lock only after receipt of a completed FHA mortgage loan application.
While loan officers try to keep their clients abreast of market activity, it’s difficult to keep everyone informed 24/7. That’s why it’s often up to you, the borrower, to contact your loan officer frequently while your loan is in process to see whether or not it’s a good time to lock. And while a lender will protect your lock when rates begin to rise, don’t expect a lender to provide you with lower rates should rates fall after you’ve locked in. Lenders take locks just as seriously as you do. Make sure you’re clear on rate lock policy and stay on top of rates. Lenders will lock anytime you’re ready, but you have to make the first move.