Rate Lock Desk Hours and Policies

I was trying to lock in the rate last night and my mortgage agent told me that he could't lock in rate as the lock in desk closed (~8pm PST). Is this true that we can't lock in rate after certain time?

1 Answer

Generally that is true.  The exception is for an application that is taken after hours and is locked at time of application.  Rate lock policies will vary by lender, but those who are floating the rate will need to make a decision by 4-5 pm Eastern time in many cases.  That is because there is a lot of afterhours trading activity in the bond markets that can affect mortgage rates when the trading desks open in the morning.  Fannie & Freddie will make rates available around 10 a.m. Eastern and lenders do not want borrowers to hedge by choosing the better rate after seeing both days rate availability.

Lenders are making commitments to buyers of loans to deliver loans at a cerrtain price and those commitments generally are made by the close of business each day.  There is a lot of good information on Mortgage Backed Securities [MBS] on this site.  MBS is the driving force behind mortgage rates.  Your mortgage officer should be able to give you a good idea on rates each day by 11 or so.  And a savvy mortgage officer will be aware of any trneds in the market that may affect rates and is able to give good advice on float or lock decisions.

Another concern might be if you can call first thing in the morning to lock a floating loan at the previous day's rates.  The short answer is 'no'.  The best time to gather the information to make a lock decision is late morning.  Procrastination beyond mid afternoon might jeopardize the ability to lock your rate.