A common misconception is that your mortgage rate is protected upon application. This is not necessarily the case. The application for the mortgage and the rate protection are two distinctly separate actions. Depending on your circumstances and advice from your NJ mortgage lender or financial planner, you may choose not to lock (Float) your interest rate at your application. Your Loan Estimate provided by the lender will confirm the rate protection at application. Make sure with your lender before you apply the following:
- Is the rate protected at application?
- For how long is the rate protection applicable?
- What are the costs if the rate needs to be extended beyond its expiration date due to delays with the closing?
- Is there a “Float down” available once the initial rate is protected and if so, what are the costs for executing?