How Your Loan Officer Works Behind The Scenes To Protect You Against Market Fluctuation

In a rising rate environment Amerifund is committed to making mortgage simple. In this week’s video, Amerifund President Jamie Cavanaugh explains how your loan officer can lock in a low interest rate for you so that you’ll still have time to go through the mortgage process without losing your great rate!


Hey everyone, It’s Jamie with Amerifund with your weekly mortgage update. So let’s talk about rate locks. What does it mean when your loan officer tells you that they’ve locked a rate in for you? Well, interest rates fluctuate with the market, and the market is constantly changing, meaning that rates can change multiple times in a single day. And when you lock-in, you secure your interest rate for a set period of time. It’s usually thirty days but it may be forty-five days, sixty, or even ninety days depending on your situation.

A rate lock protects you against market fluctuations during your lock period. This is crucial because a lot has to happen between the time you lock and the closing of your loan. Within three days of your lock, you should acknowledge your initial loan disclosures. At the same time, you should be sending all of your documentation into your loan officer. These are things like your tax returns, your bank statements, your paystubs and more.

This allows your loan officer to get your loan submitted for approval. And once your loan is approved, you should expect that there will be some approval conditions to meet. Typically, conditions can include things like letters of explanation for credit inquiries, an updated pay stub, or an updated bank statement. And after your approval conditions have been reviewed and cleared, your closing disclosure, or CD, will be sent to you for acknowledgment.

The CD will reflect final loan terms like your loan amount, interest rate, and the amount of funds that you either need to bring in or that you’re getting back at closing. About three days after you acknowledge your CD, your final loan documents should arrive in escrow for your signature. Your closing agent will arrange a signing appointment in front of a notary for you, and once you’ve signed, your documents will be sent back to the lender for review before the final step, the funding and closing of your mortgage loan.

All of these things must be completed before your rate lock expires, and if you don’t meet the rate lock expiration date, you could be faced with costly rate lock extension fees or even worse, you could run the risk of losing your low rate. This is why it’s so important to work with your mortgage loan officer, and make sure that you’re getting your documents in quickly and acknowledging them to assure a smooth closing.

Thanks for watching, and I’ll see you next week.


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