If I lock my rate with the bank and receive an official Loan Estimate along with a commitment letter, can the loan officer change my rate or terms at the last minute before closing?
The rate can change if there’s a change in your risk profile, such as an increase in your debt-to-income (DTI) ratio or a drop in your credit score. Any pricing change would be based on the rates from the day you locked.
@Olen
Could DTI change due to homeowners insurance?
Wolf said:
@Olen
Could DTI change due to homeowners insurance?
Yes, absolutely. A higher-than-expected insurance premium could increase your DTI.
Wolf said:
@Olen
Could DTI change due to homeowners insurance?
Yes, if your homeowners insurance (HOI) is more expensive than estimated, it could raise your DTI.
Rates can change for valid reasons like credit score updates, loan-to-value (LTV) adjustments, or income changes for special programs. For conventional or government loans, DTI usually doesn’t affect the rate. Banks don’t bait-and-switch locked loans; there’s always a reason for the change.
As long as your rate lock hasn’t expired, the locked rate will apply. If the lock is close to expiring, your lender should notify you and discuss options for an extension.
A lot of things can impact your rate: changes in LTV, occupancy type, credit score, DTI, or property type. These are valid changes in circumstances and can lead to adjustments.
When you lock your rate, you secure the pricing from that day. Changes to your qualifications, like credit or LTV, could affect costs. The lender should notify you if any adjustments are necessary.
Marin said:
When you lock your rate, you secure the pricing from that day. Changes to your qualifications, like credit or LTV, could affect costs. The lender should notify you if any adjustments are necessary.
If I lock for 30 days, does that guarantee my rate for that period? Or can the bank still change it last minute?
@Wolf
The rate is locked for 30 days, but adjustments can occur if your qualifications change (e.g., credit score drop or LTV changes). If delays are your fault, they might charge for an extension.
@Wolf
They can’t change the rate without a valid reason. If your qualifications change, they must provide a Change of Circumstance form detailing the issue.
Marin said:
@Wolf
They can’t change the rate without a valid reason. If your qualifications change, they must provide a Change of Circumstance form detailing the issue.
Yes, you’d receive documentation outlining what changed and why.
No, they can’t just change your rate. But during the 30-day lock period, avoid making large purchases that could impact your credit or DTI.