Rate lock expiring -- mortgage rates up 1%

What is it that you think you can "do" other than chase down the managing agent?

Do you have a financing provision in your contract ? If not, you can't get out, or you will loose your 10%. Generally banks will extend the rate lock for a small additional fee per extra day but they don't have to, and this move has been so huge that will probably not do it, you can ask. Rates are still pretty low by historical standards and it s still a good time to buy. To reduce your rate you can still switch the type of loan you re getting (from 30 frm to 5/1 arm for instance)

"To reduce your rate you can still switch the type of loan you re getting (from 30 frm to 5/1 arm for instance)"

Provided the board approves it.

Worse things can happen than you having to settle for 4.10%. We're all so spoiled.

I do have a financing provision but the bank has already approved financing for me. Doesn't that already meet the financing provision?

Yes, you HAVE financing. There is no clause that I'm aware of in any contract that safeguards a *rate*.

Rates are still at generational lows. If you think you will be in the unit past five years, go 30 year fixed. If you think you are likely to pay off the loan sooner, then go 15 year.

Do you have a commitment letter or did the bank just preapprove you?

i remember i had a 60 day lock at 3.375...it went just over 60 days but i got lucky and only had to pay a fee once bc it was a weekly fee of 515 per week...at this point if they havent called you maybe you should relock now and take the 4.1 rate rather than pay a fee and wait on the coop board which youll probably wait until 1st week of july to meet and another week and a half to close so your probably looking at a month longer.

sorry didnt realize you said mid july...ull be fine as long as they get back to you before july 1...as i said before its a fee per week i believe so as long as your lock in rate is under 3.5% then its worth whatever fees you need to pay...good luck

Check your good faith estimate or commitment letter. Does it state how much your rate can be at most, based on the prevailing rate when you applied. Or like others have stated, see if the bank can extend your rate at no cost. My bank wanted .02% of the loan per day for each day extended. Yes rates are still historically low but if you locked at 3.625 and rates today are 4.5%, that can be $250 per mont h difference on a 600k loan. Do the math on the extension and see if it is worth it or if you can get the cap/max rate on the GFE. Of course consult your attorney, if they are any good they can advise.

I'd look up the history of the building- have there been closings between July 15 - September 1- say the interview committee only meets once a month- July- and they don't approve right away and the whole board doesn't meet in August- you might be delayed until September.

Most reasonable boards will approve right after the interview, but you never know which kind of Board you draw, especially in the summer.

Thanks to all for the advice, I will talk to my attorney and the bank again-- my hunch is the bank won't do much for me, the interest rate environment has changed dramatically since I locked, so they'll just ask me to cough up the money and/or lock new rates.

I'll talk to my lawyer on what my options are regarding exiting the transaction if needed.

Brings up a good question. Hey, Matt, what does your Board do in a rising rate environment where numbers change on applicants' ratios between package submission and when the rate can really be set in stone?

> My rate lock is expiring mid-July and the board hasn't called me in for an interview yet. Normally it wouldn't be a huge issue but mortgage rates are up almost an entire 1% since I locked...

negotiate the price of what you buy downwards accordingly. higher rates is the seller's loss, not yours.

> Worse things can happen than you having to settle for 4.10%. We're all so spoiled.

that's right. this 1st time home buyer should be able to pass the increase in financing costs onto the seller in the form of a lower price. it's actually better for the 1st time home buyer imho, the lower the price, the better.

let's hope the sellers aren't spoiled though :-)

Manhattan market has definitely come alive recently. People want to buy, and on the other side people want to sell; me thinks we're seeing units that wanted to sell for the past couple of years, but didn't list due prices being lower.

Which is why: http://streeteasy.com/nyc/talk/discussion/35596-cash-buyers-are-

renegotiating the price? what leverage does a buyer have... she can't get out of contract either way

" Hey, Matt, what does your Board do in a rising rate environment where numbers change on applicants' ratios between package submission and when the rate can really be set in stone?"

The same thing it does in a stagnant rate environment; handles applications as promptly as it can. What's going on with interest rates has no bearing on this. Your finances are not my problem.

it sucks that a board would think like that matt. if these are your future neighbors why would you want to screw them over by causing them to have financial issues before they move...with the way boards go over finances i would actually counter your point that finances are exactly the boards biggest problem bc if we cant pay then major issues come up for everyone. either way i get i just wish boards would have a little more accountability.

jpaserman, it's because we're already working as fast as we can in processing applications. To suggest that we move FASTER because of some external factor is both insulting and unreasonable.

If you want more "accountability", buy a house or a condo.

Yeah I think most people just don't realize you guys are volunteers and working as hard as you can.

NYCMatt-- how long does it usually take for you guys to turn around an application, i.e. schedule an interview and make a decision?

firsttimebuyer, no two instances are alike. Some applicants are better-organized with more solid credentials than others who submit packages with holes and inconsistencies that trigger back-and-forth questions. The time of year has a lot to do with it, too; trying to coordinate the schedules of seven busy professionals during the high vacation season between Memorial Day and Labor Day is nearly impossible. Also out is the entire month of December.

At best, we try to schedule a "discussion" meeting -- at least SCHEDULE the meeting -- within 48 hours of receiving the package. If the package is particularly well-received, I'll ask the other board members if we feel the need to meet and discuss at all; quite often we all just vote to immediately schedule the interview. However, if it's clear the application has no hope of being redeemed by an interview (like bad financials), at that point we'll give our immediate answer: reject.

I try to keep the days between receiving the package and meeting with the applicant to fewer than 21. That's actually about the average span.

well you shouldn't take it as an insult bc it wasnt meant that way. I personally appreciate what boards do giving their time but its the one issue ive always had is the length of time a board sits on a package(may not be your board matt) I was just saying wouldnt you want to help a future resident by not sitting on a package if it is a well put together.. FYI i just bought in a coop and the board was a pleasure im just saying it sometimes takes boards a very very long time to respond and sometimes its a huge huge burden on the buyer and if there was even a little communication between receiving a package to getting a response it would be such a massive help to an applicant. I know it doesnt happen but its an idea that would be great in the future.

jpaserman, I totally hear you.

Which is why I'm very diligent about moving these packages through. We've all been there; it's a logistical nightmare for ALL parties involved; both the seller's and the buyer's lives are in limbo until a decision is rendered.

But most of the co-op board horror stories I see and hear come from people with bruised egos who aren't honest enough with themselves to realize that a) they're trying to over-extend themselves financially (and being "approved", "pre-approved" "conditionally approved", or whatever other term the banks dream up for mortgages does NOT mean they can really afford the property), b) their employment experience doesn't appear to be as sound to third parties as they would care to admit, or c) have way too many "wildcard" factors in their application that cast doubt among risk-averse board members.

And believe me, no board member enjoys having unfinished work staring him in the face every day he hasn't made a decision on a package. We like to move those suckers as fast as possible off our desks. And contrary to popular opinion, we really don't like rejecting applicants, because it only creates more work for us, forcing us to slog through yet another ... or another or another ... board package.