This question is specific to US. Washington state if it makes any difference.

we applied for a home loan with first choice. they provided us an interest rate lock agreement which reads like this:

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this looks highly suspicious to us as they are saying the lock is not guaranteed. should we be shopping for another lender? please advise

  • 2
    I don't think it's possible to answer this question without seeing the 'terms and conditions' referenced in that sentence. I am not a lawyer, but I highly doubt they mean "we don't need to hold up our end of the agreement if we decide we don't want to". – Grade 'Eh' Bacon Jun 21 '17 at 18:01
  • Since this appears to be abnormal, can you ask the loan officer what is meant by the lock not being guaranteed? Providing the answer to that question can likely help us answer your question. – TTT Jun 21 '17 at 18:32
  • this is what they told me: "We cannot alter this document. We have agreed to lock in the rate through XXX. Our plan would be to close the loan on or before that date. If we do so then we will honor our commitment. There is no guarantee that this will happen which is why this box has been checked." – morpheus Jun 25 '17 at 15:56

Are you paying something for this lock? I've never seen a "not guaranteed" clause on an interest rate lock. What would be the point? "We promise that we will give you this interest rate ... unless we don't feel like it when the time comes." I'd be happy to make promises like that. I can't come to a conclusion without reading the rest of the terms, but on the surface it sounds like a worthless clause. I'd be reluctant to pay anything for it.

I wouldn't necessarily go to another lender just because of that. If otherwise they seem like they're offering you a good deal, this could just be one small annoying point. If it looks like they're trying to take advantage of you at every turn and this is just one more example, yeah, go somewhere else.

  • no, we are not paying anything for the lock. we went to first choice because they are a costco approved lender but no guaranteeing the lock seems pointless. we are concerned about a bait-and-switch – morpheus Jun 21 '17 at 18:54

A rate lock, by definition, guarantees a future rate. What that form is saying is that you are not guaranteed to get the rate lock because, at the moment you are signing that form, they cannot be absolutely sure the rate lock will be available.

You should ask when they will notify whether you did or did not get the rate lock.

  • that is not correct. they told me my rate is locked. then i got the form. there is something weird about this form. i contacted another lender (first tech federal credit union) and in their form neither of the boxes is checked. i asked them to check one and the agent is saying that she is unable to do so. – morpheus Jun 21 '17 at 21:27

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