Idaho Real Estate Blog

Rate Lock Programs from Fairway Mortgage Main Idaho Real Estate Insights

Learn more about Extended Lock Program from Fairway Mortgage.

Frequently Asked Questions (FAQs) about Rate Lock Home Loan Programs

Q: Is this program only for conventional and high balance loans?
A: Yes

Q: Can you use this program for investment properties?
A: Yes, as long as they are eligible under our Fannie and Freddie products.

Q: Does this program allow for any jumbo financing?
A: Only Fannie and Freddie products are eligible at this time.

Q: Is this program available on manufactured homes?
A: Yes, as long as they are eligible under our Fannie and Freddie products.

Q: Is this program available on any new construction to include a true modular home?
A: Yes, as long as they are eligible under our Fannie and Freddie products.

Q: Can the program ever be used if the home is a resale?
A: This is specifically for new construction properties.

Q: In regards to the "new construction" requirement is this for "construction" only loan or a buyer that is purchasing from a builder once the home is complete?
A: This program would be applicable to a purchase of new construction or a refinance that the borrower holds his own construction loan.

Q: Is the upfront fee refunded if the borrower is denied?
A: Yes, send a copy of the denial statement to the Accounting department to request the refund as soon as the loan is denied.

Q: What if the new construction is not ready at the end of lock - can we extend?
A: Yes, a 30-day extension is available.

Q: Does there need to be a minimum market movement to take place before the float down is allowed?
A: No, but there will be a 0.125% rate adjustment to the current 60-day pricing.

Q: Do we need to add the upfront fee on the LE initially if we will be charging their Credit Card later? Or is this considered a change of circumstance and we can add the fee later to the LE?
A: The 1% upfront fee must be disclosed to the borrower and Intent to Proceed received prior to collecting any fees. If a loan has already been disclosed and the borrower decides to go with an extended lock, then the fee can be added as a Change of Circumstance. However, the Intend to Proceed will still be required before a fee can be collected and the loan locked.

Q: What line or section of the itemization does the 1% fee go on? Is it an APR fee?
A: The Extended Rate Lock Fee should go on the last line of section 801 and is an APR fee.

Q: How soon does the lock desk need to have confirmation of the fee being collected after the loan is locked?
A: In all states (except NY, MA, and MO) the upfront fee must be collected prior to locking the loan. In NY, MA, and MO the fee must be collected within 24 hours or the lock will be cancelled.

Q: Will we need to have a different CC Authorization signed by the borrower to be able to charge them for the lock fee?
A: No, the standard Credit Card authorization that is currently in the disclosure package is sufficient.

Q: Is the 1% upfront fee based on the loan amount or purchase price? Also with new construction, what if the purchase price changes after the lock?
A: The upfront fee is 1% of the loan amount. In the event the loan amount changes during construction, it is not necessary to collect an additional fee. The origination fee will be refunded at closing.

Q: What is an acceptable form of payment for the upfront fee?
A: A Credit card should be used to collect the upfront fee.

Q: Does everyone in the branch have to complete training for the branch to be setup on the program, or just one LO who will use the program?
A: Anyone disclosing the program should take the required training.

Q: Can the 1% fee be applied towards down payment/ closing costs at closing?
A: The fee will be refunded to the Borrower at closing on page 3 of the CD.

Q: If borrower needs to put the upfront fee on a credit card then do we have to get a credit supplement and include the increased payment on the DTI even knowing we are refunding it at closing?
A: Since these are conventional products, the credit refresh prior to closing will be sufficient for any increase in payment that may occur.

Q: Can you extend after the float down?
A: Yes, a 30 day extension would still be permitted after the float down at the Borrower’s expense.

Cory Powell
Cory Powell, Idaho Home Loan Professional
Professional Loan Officer, NMLS#1458128
3959 E Overland Rd

 

Cory.Powell@FairwayMC.com  | 208.850.3363

 Apply Online

Fairway Mortgage
ID License Number MLO-18710
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*VA loans subject to individual VA Entitlement amounts and eligibility, qualifying factors such as income and credit standards, and property limits. Fairway is not affiliated with any government agencies. These materials are not from VA, HUD or FHA, and were not approved by VA, HUD or FHA, or any other government agency. **Eligibility subject to program stipulations, qualifying factors, applicable income and debt-to-income (DTI) restrictions, and property limits. Copyright©2018 Fairway Independent Mortgage Corporation. NMLS#2289. 4750 S. Biltmore Lane, Madison, WI 53718, 1-866-912-4800. All rights reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates and programs are subject to change without notice. All products are subject to credit and property approval. Other restrictions and limitations may apply. Equal Housing Lender.

Posted by tlangford at 12/20/2018 2:29:00 AM
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