I would find my own financing. Usually, rates are locked in for 30 days, unless things have changed rapidly. What happened to me was that the bank (mine for 32 yrs and holder of my mortgage at that time), took so long and kept asking for more and more papers (credit rating of 840!), that the rate had gone up by the time we closed on the financing. I truly believe it was intentional but didn’t have time to start the application process all over again.

Well, finding it isn't the problem. What I don't understand is how you are even supposed to compare it between two places when neither will give you the actual rate until you promise to use them.

They will all give "an estimate", but an estimate that changes ~0.5 percent a month doesn't do me any good when comparing.

I understand the interest rate is volatile, but I don't get at what point and how can I call and "The quote I give you is what we lock in today." and then compare that to the same from another place? No one seems willing to do that until I sign papers that appear to be a commitment.

Who are you dealing with? I refinanced about 3 years ago. Have things changed that much? The problems I ran into were Navy Federal Credit Union changing the interest rate on me after I submitted a formal application and would never give me an explanation why - there was no "credit worthiness" involved at all - I was a dream borrower. I told them to take a hike and went to my local bank. Unfortunately, my local bank is owned by a bank in PA and is no longer allowed to make any decisions on lending, something they did NOT reveal to me when I applied (my present mortgage was with them). They are just salesmen and paper-gatherers. The main bank took forever and dragged things out by asking for a document, it was provided, and then waiting 3 weeks and asking for another and on and on.

Try your own bank. Try a credit union if you qualify for membership. Try USAA if you're a member. I can't believe things have changed this much in 3 years, but it may have. Remember, a formal application is NOT a contract - you can apply and then decide not to go with a lending institution. Perhaps they don't reveal interest rates anymore until they have a formal application and can properly evaluate your credit worthiness.

The short answer is that you can't compare rates.

No bank is going to lock you into a rate for a loan that will not be originated for months or years into the future. If you have to apply for financing before you begin then the costs associated with that application and any appraisals are just a cost of building a home rather than buying existing.

In the end, the intent to proceed doesn't lock you into a lender but any loan application fees and/or appraisal fees that are incurred as a result of your intent to proceed will be yours.

Ultimately, your best bet is a call to an attorney in your area who does closings. He will probably answer questions about the intent to proceed over the phone at no charge.

Perhaps, I should just wait until close to closing date and then call around within 30 days?

OPs question has spawned a follow-up from me: I realize rates and fees can differ between lenders, but does the variation between lenders also change that much? In other words, if one lender seems higher than another, is there a good probability they would always be comparatively higher even if rates change?

Yes, rates and closing fees between lenders vary tremendously from lender to lender. Especially if you are working with the builders lender where the builder is paying some or all of buyer's closing costs, the rate is higher than a 3rd party lender. Compare costs. It may not be worth the extra expense (higher rate for entire loan term + higher closing costs) to have the builder contribute toward your closing costs.

One of the changes made in 2015 for the loan industry is that the lender now provides you a Loan Estimate showing all the costs to close in an easier to read format for consumers. Here is an explanation: https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-estimate-en-1995/

You should be able to get this LE without having to sign the notice to proceed. In fact, I would argue that the entire purpose of the LE is so you have the information to make an informed decision on to proceed with a given lender. Do you have a LE from each of the lenders you are considering?

bry911, an attorney can quote his fees to close the transaction but can't quote bank fees and rates with any accuracy.

Perhaps, I should just wait until close to closing date and then call around within 30 days?

I would give it more than 30 days. I am not sure how streamlined the process is now, but a few years ago 45 days was pretty standard.

I realize rates and fees can differ between lenders, but does the variation between lenders also change that much?

First, this is at the edge of my expertise, but I will attempt to relay my understanding until someone with more understanding comes along.

The answer is both yes and no. A lender that charges higher rates will typically charge higher rates on average, however, depending on the timing of your loan and rate changes a higher rate lender may have access to a lower rate loan. It is really a lot like gas stations, suppose you drive by two gas stations on the way home, one may typically be higher than another, but every once in a while that changes.

An attorney can quote his fees to close the transaction but can't quote bank fees and rates with any accuracy.

Sorry I wasn't more clear. Different states give the intent to proceed different weight. It is not binding in any state, but the fees that an intent to proceed allow the bank to charge the consumer in cancellation are different. Some states essentially hold that the intent to proceed is the borrower's acceptance of most fees associated with origination of the loan and you might be on the hook for the full loan origination, other states hold that it is essentially worthless and you must separately authorize all loan fees.

For example, in my state the document is worthless, banks use it to demonstrate compliance with RESPA, but only fees paid in advance by the consumer are recoverable by the lender. In other words, here the appraisal and the application fee must be collected from the buyer separately, and can't be billed to the buyer later, any uncollected fees are essentially forfeit when the buyer walks away.

So my advice to call an attorney was to evaluate how your state handles the intent to proceed.

One more idea to consider: get your loan from a non-bank lender. Non-bank lenders only originate mortgages and don't have any of the other banking functions so the entire process is better.

Big box banks are not the best place to originate your loan these days. Their process has changed tremendously since the great recession. They no longer use true experienced loan officers in many of the big box banks IME. It is less expensive for the bank to use untrained personnel and have the underwriter do the file review as the first person with any loan qualification experience. Unfortunately by the time you get to the actual underwriter a lot of time and effort has been put into the process so you are completely invested in getting the loan.

As a consequence it is very common to receive a pre-approval on the front end and get a denial about a week before closing when using a big box bank. Not because the buyer is unqualified, but because the bank overlays are so restrictive that the buyer doesn't meet that particular bank's criteria. As an example Wells Fargo has a huge fall out rate in the neighborhood of more than 40% of their pre-approved buyers receive denials just before closing. You might ask why the LO didn't inform you at the beginning of the process. They didn't inform you for two reasons: one, the LO didn't know and two, they are prohibited from telling you any specifics by the bank. It must go through the entire process first and then you get notified by letter.

As a Realtor I have seen this many times and the buyer is well qualified. In fact, the buyer ends up getting a mortgage with a mortgage lender immediately after the denial because with the non-bank lenders I use/see/experience there are no overlays. Save yourself the time, effort and money and start with a lender that only originates mortgages and doesn't do other bank activity. IME the rates are better and the costs are lower and the process is much easier. Plus the LO knows the underwriting criteria and you don't experience that period of non-communication between pre-approval and final approval.

No lender has given me a loan estimate and no lender is willing to, until I sign the intent to proceed, which puts me on the hook for application and appraisal costs. This seems ludicrous to me!

"Agree to whatever cost I make up in blind faith, or be charged whatever cost I decide to charge you for not agreeing, when I reveal my made up cost"......

This is the first time in 40 year I've ever been put in such a position in any business transaction. It is also the first time I've bought a house.

I am in Texas btw.

Currently, the builder's lender looks like they will be the better deal. They have higher fees, but they _claim_ they will have a lower rate. Since they won't lock in the rate until the house is further along, all I can do is hope, in blind faith, that what they say and what they do coincide. However after doing business in America for 40 years of life, that's never ever been the case when it isn't guaranteed in writing.

My current plan is to wait until all parties willing to lend, are willing to offer me the chance to lock in a rate and send me a loan estimate the day I call. What I am unsure of, is if that is even possible! They are making it sound like the process of getting the LE takes several business days, so i still have no idea how anyone is supposed to know what they are agreeing to or compare.

If I start the process of getting the LE until there are less than 30 days until close, and then they give me something outrageous that I won't agree to, then there isn't time left to go elsewhere and do it again.....

This makes no sense! I am being railroaded into "agree to whatever we decide to charge you later", and I find it hard to believe such a thing is legal, much less a common way of doing business.

No lender has given me a loan estimate and no lender is willing to, until I sign the intent to proceed

You are using confusing terminology in your response that I am struggling with.

Lenders are required by law to provide you a loan estimate form within three days of applying for the loan. The intent to proceed with loan application (TIPLA) shouldn't be valid until after you have the loan estimate form. When the rate is unknown (as yours is) they are required to use a rate indexed on the current rate (essentially what the loan would be if you could lock it in).

I don't see how they are getting around Federal law by making you sign a TIPLA before you have the loan estimate form. I mean just wait three days after you apply for the loan to sign the TIPLA, since they are required to get the estimate to you in three days.

They are not going to lock in a rate for you unless you are somewhat close to closing, and there will be notes that the rate is based on today's rate. You then have something to compare.

If I start the process of getting the LE until there are less than 30 days until close

The lender should send you an updated loan estimate form. However, even if they don't there are limits on what can change. These vary a bit by state, but generally if you didn't lock in a rate that can change, as well as insurance, taxes, and certain third party fees. There are other fees that can only change 10% and others that can't change at all.

To fix this just make them lock you in at 60 days and request the updated loan estimate form. An interest rate lock would require the generation of a new estimate anyway.

Well, I promise you that I have zero loan estimates in my mailbox and it has been more than 2 weeks since I started talking to either lender.

What I do have is one spreadsheet with a rate and list of fees on it that says at the top, "This is not a loan estimate and these rates and fees may change at any time", from lender A.

I also have an email that has a hand written, "You are preapproved for x dollars and the estimated rate on a 30 year is y"

Perhaps, they are playing with what an "application" actually is. However, lender B had me fill out an online form with the words "Loan application" at the top...

That aside, you and others are agreeing that they don't have to lock in a rate, so I ask, what then protects the consumer from them just making up a number later?

I could understand, if I had an official piece of paper that said, "The market rate today is X and we guarantee we will give you a rate 1.68 percent above the market rate when we lock in", and I also had the ability to see the market rate on my own to confirm.

All I have is two vague "promises" that want me to hope they come true. So, all of this seems very amiss, and it is stressing me out to no end.

I just want to add.

The things that you are saying make me think that you need professional advice from someone with experience. I am going to second Denita's recommendation that you really need to talk to a reputable mortgage broker.

I've talked to more than 5 realtors and they all take the "I can't give you advise on that, because I'm not a lender or a lawyer", stance....

I could go talk to a third lender/ mortgage broker....If I understand you guys right, this is different than the people that I am currently talking to, in that they are a middle man between me and the lenders. I called one or two, and both concurred that I should have a Loan Estimate in hand...yet I don't. Both also offered to get me a mortgage, but at a significantly higher rate than either of these lenders offered.

Also, surely I am interested in the builder's lender's offer to pay closing costs and give me this fabulous rate they are offering. I just don't see how to actually get it guaranteed rather than bait and switched. I hear you say they can only change it so much, but how do I verify or even see the rate, their addition to it, or how much they are changing it, or enforce that they stay within some range? It's all good and well that they are supposed to do something, but people don't do what they are supposed to if noone holds them accountable, in my experience.

I probably have to go hire a lawyer whom is going to charge me hundreds of dollars by the hour, just to iron out this silly process that should be one party agreeing to a good or service at an offered price, and the other agreeing to it....

I appreciate your feedback and help though. I understand there is only so much you guys can tell me without seeing the paperwork and hearing the phone calls.

I could understand, if I had an official piece of paper that said, "The market rate today is X and we guarantee we will give you a rate 1.68 percent above the market rate when we lock in"

Because that is not how mortgages work. Mortgages float and there is no way the bank will be able to tell you with any certainty what the funds are going to be at. The Federal funds rate establishes the base line but mortgages float above or below that baseline and how far above or below is a heck of a lot more complicated than just guessing a percentage and guaranteeing it.

For example, in May of 1981 the Federal funds rate was 19.29% and mortgages notes were funding at about 16.4% (under the Federal funds rate) and in November of that same year when the Federal funds rate fell to 12.25% mortgages notes were funding at 17.82% (which was over the May rate even with Federal funds being much lower).

I really wish I could tell my boss that my hourly rate could be anything at payday, and I will decide it at that time, after the work week is done already, and the deadlines he has to meet have passed.

I get that there are factors. I get that the rate changes. I don't get how I am expected to agree to an unknown cost.

If it changes, fine, tell me what it is right now, and let me agree to it, right now.

If we can't do that, right now, then let's do it later, and when later comes you tell me what it is, and I agree or disagree to it, no? As long as later leaves me time to find someone else who will tell me what it is and allow me to agree to it in time.

Are you telling me that isn't possible?

I am struggling to understand your position, and I think it is unreasonable.

What exactly do you think an attorney is going to do for you? There is no piece of paper they can give you today that is going to commit them that far in the future. I mean your attorney can play hardball and probably require them to send you the estimate, and if you are short on toilet paper it could come in handy.

I doubt very seriously that you are going to manage to get a house constructed without meeting one of the six change in circumstance requirements that lets them change practically anything they want in the estimate and disclosure.

If you want something set in stone you are going to have to buy an existing home or one that will be completed within 60 or 90 days. Otherwise the risk of it no longer being a great deal on their mortgage is just a cost of doing business at this point.

How far in the future do you think this is?

The esitmated completion and closing date is in 45 days....

The house was already mostly build when I agreed to buy it. It isn't starting from scratch.

Let me edit my original post to make this very clear. Sorry if you were under the impression that this was next year or something.

Edit the forum won't let me edit the OP. Says page is not found.

I get that there are factors. I get that the rate changes. I don't get how I am expected to agree to an unknown cost.

You are not agreeing to an unknown cost. There is no cost that the TIPLA obligates you to pay something that is unknown.

If the rate is not guaranteed, it is an unknown cost.

While I am not obligated to pay it at close, and could throw my hand up in the air and yell, "I refuse!", I will get sued for breaching the purchase agreement where I agreed to buy the house. I will lose the house because there won't be time to seek out someone else. I will also lose appraisal fees. That is implicit obligation to pay unknown costs.

That was exactly what I needed. Thank you! Now I can go in and ask what's going on with this process while actually knowing how the process is supposed to work.

All lenders are required to provide you a loan estimate (LE) prior to you signing a commitment to accept the loan as of Oct 3, 2015. The LE must be provided to you within 3 business days of you providing the following 6 pieces of information below. Whether or not you filled out a loan application is immaterial to the provision of the LE according to the CFPB.

1. Consumer’s Name.
2. Monthly Income.
3. Social Security Number.
4. The Property Address.
5. An Estimate of the Value of the Property.
6. The Loan Amount.

I would think you have provided all of the above to get the info you have received.

The LE is so you can compare the loans offered by different lenders in the same format so the comparisons are easy and accurate.

Point out that they are required to give you the LE without a prior commitment to accept the loan and if the person you are working with doesn't understand that - then I would make a wide berth of that individual and probably that lender as it shows a total lack of training.

45 day locks are common. Even a 60 day lock is possible. Check into their lock periods and the associated cost, if any.

The fact that we now know that you are not doing a Construction to Perm loan and closing months down the road, changes things quite a bit.

45 day locks are very common, even if you have to pay a small fee for it. 45 days is a fairly average amount of time it takes to close on a "regular" resale purchase. You are buying a spec home, that is just not quite finished.

Any lender should be able to give you a LE and a rate lock under these circumstances.

Heck I just locked my rate for 365 days.... had to pay some to do it - but it's locked.

45 days not being able to lock and send you all the estimates is POOR.

Best of luck to you.

I call mortgage brokers and present an identical scenario: IF credit is 800+, IF the cost of the house is $X, and IF I am putting down $X, then I need an exact list of the costs I will be charged, along with today's interest rate for (X years, no points, no origination). Some resist, and I state that this is the only way I will be making a decision. Most will give me what I need. I take detailed notes, and then make my decision. I used to have a broker who beat everyone, but he retired.

I insist on getting this information and then selecting a company. So far, so good, and I've done it quite a bit.

When I got a mortgage on my newly built house in TX we used a mortgage broker in San Antonio, who was extremely helpful. We submitted one application through the broker, and he "shopped" our credit rating, property value, and requirement for a loan. We started about 60 days out from the expected closing date, and he was calling us about every other day with the status of what rates were available based on lock-in period and other factors. He was also monitoring financial factors that were indicators of expected upward or downward trends in mortgage rates.

We finally locked in about 30 days out and were provided all the details for closing costs, interest rate, etc. We did close with that lender, but about two months later they sold it to another bank. It seemed to be just a commodity market, where customers were traded back and forth between banks based on their credit rating and mortgage details.

Bruce

Aha, "David" always comes back to edit and add spam.

"David's" spam was removed, but "Rachel Hunter" does the same spam editing stuff as well.