Lock policy
A lock is a contract, not a promise
It has a price, an expiry date and a worst-case clause. Understanding all three is worth more than a quarter point of negotiation.
A lock is a contract, with an expiry and a worst case
Longer locks cost more because the lender is hedging longer. Here is what each period costs, who pays for an extension, and the one float-down you get for free.
0.125 points per seven days, to a maximum of 30 days. If the delay is ours, we pay for the extension. That is written into our lock policy rather than decided case by case.
If the market improves by 0.250% or more after you lock, you may float down once to the new market rate less 0.125%. It must be requested at least ten calendar days before settlement, and it resets nothing else about your file.
An expired lock is repriced at worst-case pricing: the higher of the original locked rate or current market. This is industry standard and it is why we monitor lock calendars daily rather than weekly.
You can lock at application, before the appraisal is back. If the value comes in low and the loan-to-value changes tier, the pricing adjustment changes with it. We tell you the exposure in advance.
| Lock period | Cost | When we use it |
|---|---|---|
| 30 days | Base pricing | Refinances and quick settlements where the file is already complete |
| 45 days | 0.125 points | Our default on purchases. Most Philadelphia contracts settle inside it |
| 60 days | 0.250 points | Files with a subject-to-sale contingency or a slow condominium questionnaire |
| 90 days | 0.500 points | New construction and extended settlement dates |
Sample lock pricing. Extension and float-down terms shown are an illustration of a written lock policy, not a commitment. Lock pricing moves with the secondary market.
Where the lock sits in the file
- 01
Day 0, application
You may lock from the moment you apply. Most purchase borrowers wait until they are under contract with a settlement date they believe.
- 02
Day 1 to 3, Loan Estimate
Issued within three business days. It states the rate, whether it is locked, and the date the lock expires.
- 03
Day 3 to 12, appraisal
If the value lands in a different loan-to-value tier, the pricing adjustment changes even though the rate was locked. We disclose that exposure at lock.
- 04
Any time, float-down
If the market improves by 0.250% or more, request the float-down at least ten calendar days before settlement.
- 05
Day 35 to 45, clear to close
We monitor lock calendars daily. An expiry spotted on day 41 is a $500 extension. Spotted on day 46 it is a repricing.
- 06
Settlement
Rate locked, Closing Disclosure three business days earlier, final numbers reconciled line by line against your Loan Estimate.
Rates, points and locks
Ask any lender you are comparing whether their extension policy is written down. If it is not, the price of an extension is whatever they decide on the day.
See sample ratesDivide the cost by the monthly saving to get the break-even in months. On our current sample grid, one point on a $400,000 loan costs $4,000 and saves $64 a month, which is 62 months. If you will hold the loan longer than that and are not likely to refinance, it works. If not, it does not.
Once you are under contract with a settlement date you believe. Our default is a 45-day lock at 0.125 points, which covers most Philadelphia contracts. Locking earlier costs more; locking later risks the market. You may lock before the appraisal returns, but a value surprise can change the pricing tier.
You may use your one free float-down. If the market improves by 0.250% or more, we relock at the new market rate less 0.125%, requested at least ten calendar days before settlement. It is written into our lock policy rather than granted case by case.
The rate determines your principal and interest payment. The APR expresses the rate plus origination, underwriting, credit, flood, tax service and mortgage insurance as a single annualized figure. FHA shows a wide gap between the two because the 1.75% upfront premium is included.
Sometimes, not always, and we will not pretend otherwise. Our flat $1,095 origination fee means we usually win on total cost at smaller loan amounts and on files that need real underwriting. If a competitor quotes materially lower, send us their Loan Estimate and we will tell you honestly whether it is genuine.
Under contract? Let's talk about locking
Settlement date, program and price. We will tell you which lock period fits and what it costs.
No application fee. Soft credit pull at pre-qualification. Flat $1,095 origination at closing.