RICHMOND, VA (WWBT) - It's no secret, when dealing with lenders anything they promise you must be in writing or you may be out of luck. And this goes the same for low interest rates. The State Corporation Commission warns verbal agreements aren't always guaranteed.
With housing prices at a serious low now is the time to buy a home. But many people are finding that the interest rate they were quoted from the beginning isn't the same as when they close on their home.
"In some cases the mortgage lock in has not been honored," said Katha Treanor, State Corporation Commission.
State Corporation Commission has received many complaints from people who thought they had their mortgage rate locked in but that interest rate went up over the time it took to close the deal.
"State Corporation Commission says that a mortgage rate lock in is a written agreement between a mortgage lender or a mortgage broker acting on behalf of a mortgage lender and an applicant for a mortgage loan," Treanor said.
The key word is written agreement which some borrowers fail to get. Without it during the process of buying a home the interest rate could go up.
"Having a rate lock disclosure that you have signed holds the lender or broker accountable for that rate. Anything spoken over the phone is not worth anything," said Ben Burkett of Benchmark Mortgage Incorporated.
Mortgage lenders like Bechmark Mortgage Incorporated warn borrowers to get a signed lock in agreement. And lastly be sure the lock in period is adequate time for you to close on the home loan.
It typically takes about 30 to 45 days to close on a home experts say. So even if you have a lock in agreement, you'll also want to make sure that it covers a month or more so you are still garneted the low interest rate you were quoted when you started.