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Better credit score doesn’t guarantee cheaper loan

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One of the unusual features of the U.S. mortgage market is that borrowers are obliged to select a lender before they know the price. They have a price quote from the lender they select, and the quote may be instrumental in their selection decision, but the price is preliminary. It is not final until it is locked by the lender.

Before the crisis, it was common to lock on the spot, which meant locking the quoted price. Today, that is the exception, reflecting tighter underwriting requirements and the increased risk to lenders of closing a loan that does not conform exactly to the rules. Locks are usually delayed for some days, sometimes for weeks.

Delays in locking mean that the lock price can differ from the price quote on which the borrower made a selection decision. The lock price can be higher or lower, but more often than not it is higher. These articles will explain why.

One reason the lock price can differ from the quoted price is tha...