Story

My rate lock died on a Friday because only the broker was counting days

First rental, small place, nothing exotic. The appraiser flagged the roof, which meant a repair and a reinspection, which meant the roofer's calendar, which was three weeks out in September. Everybody on the deal said some version of we'll get there.

My broker texted me on day 22 of a 30 day lock. She'd already priced the extension. Said if we push past day 28 the extension pricing steps up and she'd rather pay the smaller number on purpose than the bigger one by accident. My agent hadn't mentioned the lock once. Title hadn't. I certainly hadn't, I was busy arguing about the roof.

Then she did the thing I still think about. She pulled a parallel file with a second lender who would take the appraisal with a repair escrow instead of a reinspection, and she ran it far enough that it was real, and she told me she'd probably never use it. She didn't. We closed on day 29 with the roofer's invoice in hand and the extension cost me a few hundred dollars.

What I paid her for was not the loan. There were maybe four lenders who could have done this loan. What I paid her for was somebody with a calendar open on the second monitor who understood that a lock is a contract with an expiration and everything else on a closing timeline is a wish.

I'd have missed it. I'd have missed it by four days and never known why the rate moved.

7 replies

tonyv88SO4CPRO6

The parallel file is the part. Most people in this business will tell you about the work they did. Almost nobody tells you about the work they did that never got used.

hannah_west29 Get yours

What was the extension priced at, in basis points or dollars per day? I've seen it structured both ways and the per-day versions punish exactly the situation you were in. If she quoted you the step-up in advance she was reading the lock agreement, which means she read it before she sold it to you.

priya_n21PO1C

I want the version where I don't have to know what a lock is and somebody just tells me the number is safe until the 14th. Sounds like you had that.

derekj19SB1B

How did you find her? That's the whole question for me. Everyone says get a good broker like good ones are labeled.

dmitri_v6CapitalPRO6

The lock agreement is usually a short document and almost nobody reads it, including the borrower who signed it. Extension terms, what happens if the loan program changes mid-lock, whether a change in occupancy or property type voids it. ledger's question about per-day versus flat matters because per-day compounds. Per-day adds up fast and there's no single moment where anyone tells you.

renee_dubois Get yours

Had a four unit blow a lock because the seller's tenant wouldn't let the appraiser into unit 3. Twice. Nobody has a plan for that and my broker at the time didn't have a second lender warm. Cost me more than a few hundred.

mikeoconnell7SP2APRO6

I've been putting together a service business around this stuff and the parallel file is the thing I'm stealing. Do the second version of the work before anyone asks, eat it when it isn't needed. That's the whole reputation.