Q1. What is a Rate Lock?
A Rate Lock is a lender’s guarantee that the rate you have selected is protected against rate fluctuations in the marketplace for a specified period of time. AHC Lending takes it a step further and locks in not only your interest rate but also your closing fees. This lock period will have an expiration date based on the lock term that you selected.
Q2. When can I Lock?
You can request Rate lock upon submission of your completed loan application and upon payment of refundable deposit. You can request rate lock period based on your close of escrow date. AHC Lending offers you a wide selection of choices and flexibility in determining a rate lock period on a purchase transaction. We offer 30-, 45-, and 60-, day lock periods.
Q3. How do I know when my Rate is Locked ?
All Interest Rate Lock requests are subject to Rate Lock Confirmation. You will recieve your Rate Lock Confirmation within 48 hours of your Rate Lock Request via email. Interest Rate and Point lock are guaranteed only when a written confirmation is recieved by you.
Q4. Will there be a charge or deposit required to lock in my interest rate?
AHC Lending usually does charge a small partially refundable deposit at the time when your rate is locked. You must be ready to proceed with your loan application once your rate is locked-in. Deposit will be credited towards the cost of your appraisal report, credit report, and costs incured to obtain your loan approval through our automated underwriting system. Your deposit is refundable in an event that your loan application is denied by us minus any costs of apprsaisal report, credit report and automated underwriting approval.
Your deposit is non-refundable if your loan application is withdrawn or cancelled by you.
Q5. What happens if the interest rate drops after I have locked in my rate?
AHC Lending offers a free float-down option. At the time when your documents are ready to be drawn, if our posted Rates are at least 0.25% lower in Rate for the same total lender points and or rebate than your originally locked rate, you may float down your rate. The new rate will be the new rate posted on our website for the same or lower total lenders points and fees or rebate plus 0.125% (certain restrictions apply*).
For example, if you locked 6.7500% at zero points and our posted rate at the time when your loan documents are being drawn is 6.25% at zero points, your final rate would be 6.375% at zero points.
Float Down Option is applicable to Interest Rate Only and not to both Interest Rate and Points or Credit. Your Points or Lender Credit remains the same as your original loan terms.
Float Down Option is available on original Rate Locks only and is not available on Expired or Extended Rate Locks.
Q6. Should I lock or float my rate?
AHC Lending offers a free float-down option. So, it is best to lock as soon as you are able since no one can predict the direction of the interest rate. We offer lock 30, 45 and 60 day periods. Refinance transactions may be locked at the time of loan application. Purchase transactions may be locked once you have an accepted offer on a property.
Q7. What happens if the loan process takes longer than my lock period?
If the delay is caused by AHC Lending, we will extend the lock at no cost. However, if the delay is caused by you or a third party service provider, you will be required to pay for the cost of the lock extension. Furthermore, depending on mortgage market conditions, your loan may be subject to worse case pricing between your Locked Rate and current Interest Rates. Delays caused by you include, but not limited to, (a) requesting subordination of an existing second mortgage or home equity line of credit, (b) not supplying loan documentation within one day of our request, (c) providing inadequate, obsolete or incomplete documentation, (d) changes in loan terms, or loan program, (e) delaying termite inspections, survey inspections, appraisal inspections or document signing appointments.
Q7. What is the cost of a Lock Extension?
Rates are valid through the expiration date. Your loan must disburse by the expriation date. AHC Lending, at it sole discretion, may extend your Rate Lock according to the following schedule.
7-Days: 0.25 point extension fee
10-Days: 0.50 point extension fee
15-Days: 0.750 point extension fee
20-Days: 1.000 point extension fee
25-Days: 1.25 points extension fee
30-Days: 1.50 point extension fee
Rate Lock extensions are subject to market availablity of the Locked Rate and loan product. Rate may not be extended if the Rate or Loan Product is no longer offered by AHC. If your loan is not funded by the end of the extension period you selected, any further lock extensions will require that the loan be re-priced at the worse-case scenario between the rate you originally locked and current market rates. Rate lock extension must be confirmed prior to expiration of your original rate lock.
Q8. Can I choose a different program or rate after I have Locked?
You may but you will receive worse case pricing of either the pricing you originally locked into or the current available pricing. In addition, an extra .125 points will be charged for changing your original terms. Therefore, please carefully consider different programs and rates being offered before locking.
Q9. Can I re-lock my Rate if I Cancel and Re-apply?
You may but you will receive worse case pricing of either the pricing you originally locked into or the current available pricing. In addition, an extra .125 points will be charged for changing your original lock terms.
Q10. How Do I Lock?
You may complete our online loan application or contact your loan advisor to lock-in your interest rate. Alternatively your loan advisor can assist you in completing your loan application and lock-in your interest rate at the time of your loan application and submission of your deposit.
Q11. What is the difference between a Rate and an APR?
The Note Rate (Interest Rate) is used to calculate your principal and interest (or interest only) payment each month. The APR (Annual Percentage Rate) is a calculation based on standardized federal regulations. In addition to the interest rate, APR factors in other finance charges such as certain loan fees, and Mortgage Insurance premiums, if applicable, to show the total cost of the financing over the scheduled life of the loan. The APR is designed to help borrowers fairly compare different lenders and loan options.
Please note that the loan amount will influence the APR calculation, with higher loan amounts reporting lower APR. To get a true comparison, the same loan amount must be used. Lenders like AHC Lending allow you to input your loan amount into their websites which generally calculates an accurate APR. Beware of lenders that just display a rate chart on their website. These websites are reporting an APR for a set loan amount and your APR will be different.
Q12. Is comparing APRs the best way to compare lenders and loan programs?
The Federal Truth in Lending law requires that lenders disclose the APR when they advertise a rate. The APR is a calculation designed to present the total cost of financing over the term of the loan, including interest and certain fees. However, since most people do not keep the mortgage for the entire loan term,
it may be misleading to spread the effect of some of these up front costs over the entire loan term. In evaluating ARM loans, the APR can be particularly confusing since no one knows exactly what market conditions will be in the future, assumptions must be made regarding future direction of interest rates . AHC lending calculates accurate APR based on number of loan factors including applicable Mortgage Insurance. Beware that many websites assumes only a certain loan amount when calculating APR and may not included Mortgage Insurance premiums when calculating APR.
You can use the APR as a guideline to shop for loans but you should not depend solely on the APR in choosing a lender and rate/point combination that's best for you.
In comparing lenders, it is recommended that you look at a particular program
and rate and compare total points and fees being charged by each lender for that particular rate. It is important to remember that rates change every day, and sometimes more than once a day, so it is important to compare lenders at the same day and time. AHC Lending offers a real time interest rate quotes
in a changing market environment to provide you the most accurate interest rate information.
* Free float down policy is Guaranteed only for loan amounts upto $417,000. AHC will make its best effort to float down rate for loan amounts in access of $417,000 but will not guarantee product or pricing availablity due to market restrictions. On-Time Closing Guarantee not availalable when exercising Rate Float Down option.