AgentMortgage

3 scams to avoid when locking your loan

Borrowers often blindsided at different stages of lending process

Editor's note: This is the first of a two-part series. Shopping for the best deal on a home loan has many pitfalls, but by far the most daunting is that lenders will not commit to the prices they quote to shopping borrowers. While borrowers seldom realize it when they begin the process, the fact is that they are forced to select loan providers without knowing the exact price they will pay. Why quoted prices are subject to revision Because locking imposes a cost on lenders, they won't lock until a) they have enough information about the borrower to be reasonably sure that the borrower qualifies and that the price quoted is the correct price, and b) there is a significant probability that the borrower will go to closing. If the quoted price that is locked by the lender is wrong, the lender can realize a loss when it is sold, and if the transaction doesn't close, the lender has incurred the lock cost for nothing. The quoted price can be wrong for two reasons: One is that the ...