Lock Now?

S

scubasteve

Active member
I?m roughly 6 months out from closing and my builder lender (WF) is asking if I want to lock now ahead of the Fed meeting next week for $5k cost.

Rate for a jumbo 7/6 is 3.875% with one free float down when I get 45-60 days out.  Builder lender also pays for any costs due to builder delay.  Seems like I have nothing to lose (other than the 5k cost). 

They are offering points 3.75%($5k) and 3.625% ($12k) but given the free float down option I feel like I should pass on this even though the break even point is roughly 2.9yrs and 3.6yrs, respectively.

Has anyone seen better than this? Thoughts?

 
Thanks Zovall and I assume Schwab is typically competitive?

WF does have relationship pricing which you need to keep funds in 1 day after closing; they do offer a free ability to recast which is nice:

$250,000 or more is .125% rate discount

$500,000 or more is .25% rate discount

$750,000 or more is .375% rate discount

$1,00,000 or more is .50% rate discount

zovall said:
Looks like Schwab is the same:https://www.schwab.com/mortgages#bcn-table--table-content-90641

They also offer the discount for moving money over but you might have to keep it there for 6 months or something (unlike WF which allows you to move it out anytime after closing)
Click to expand...
 
It's possible to get a PE (Price Exception) to refund at closing your lock deposit. Just ask at time when you exercise your float down. The fixed rate extended lock has a full refund anyway, but the ARM terms are different.


Also, you are locking the entire rate sheet. A FINAL decision is not being made on product, price or rate buy down at time of lock. You still can adjust everything at time of your float down - really just setting final terms before closing - as it's hard to say if rates will improve enough for you to "float down" given current rate trajectories.

Now isn't the time to consider points or rate, but locking would be advisable.

My .02c
 
scubasteve said:
Thanks Zovall and I assume Schwab is typically competitive?
Click to expand...

They did seem competitive when I was looking last year. It seems they are just a funnel to Rocket Mortgage/Quicken Loans. The relationship tiers go higher than WF, BofA, Citi.
 
scubasteve said:
Thanks Zovall and I assume Schwab is typically competitive?

WF does have relationship pricing which you need to keep funds in 1 day after closing; they do offer a free ability to recast which is nice:

$250,000 or more is .125% rate discount

$500,000 or more is .25% rate discount

$750,000 or more is .375% rate discount

$1,00,000 or more is .50% rate discount

zovall said:
Looks like Schwab is the same:https://www.schwab.com/mortgages#bcn-table--table-content-90641

They also offer the discount for moving money over but you might have to keep it there for 6 months or something (unlike WF which allows you to move it out anytime after closing)
Click to expand...
Click to expand...

Citi is a bit more competitive.

$50K or more - 1/8% off
$200k or more - 1/4% off
$500k or more - 3/8% off
$1M or more - 1/2% off
$2M or more - 5/8% off

When I locked back in March, I moved $500k and got 3/8% off PLUS 3/8% rebate (would have been 1/2% rebate if I locked a day earlier). It was also an extended lock, so it could be extended beyond the 60-day lock for no fee.

I locked with Sherry Wang, who is quite well known and highly recommended by TI users.
 
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