Locking the rate on a mortgage means obtaining a lender’s commitment that it will make the specified loan at the specified rate, points and other fees within a specified future period. It used to be quite easy. In 2005, I guided a friend through the entire process at an online site and we locked his refinance within an hour.
No more. My e-mail register is clogged with complaints about the rate-locking process. Most complaints arise out of lock delays — the borrower requests a lock today but it isn’t provided until days or weeks later. Such delays involve risk to the borrower that the market rate will increase, or that the lender will claim that it has.
Delays are more frequent today than before the financial crisis, and the delay periods are longer. Before the crisis, income and asset documentation as well as appraisal requirements were often waived, facilitating the locking process. There are no waivers today.