Ultimately, the lender and borrower act in good faith to close the loan in a timely manner. If the lender asks you for more documents, if you answer a salary supplement or a question about a tax return, answer immediately. At the same time, you should expect your lender to operate in the most efficient way possible to ensure that your final documents arrive if they are. If the Lock Agreement Rate is not very clear to you, make sure you talk to your credit officer before you go too far in the process. The amendments also explicitly define each of these charges, taking into account, for the most part, the definitions contained in the treatment regulation. However, the new legal definitions clearly show that 1) while lenders and brokers are entitled to « application fees, both cannot do so under the same loan, 2) « brokerage fees » and « original fees » may be based on a percentage of the principal loan amount, 3) « commitment fees » cannot be collected unless the borrower receives a written commitment no later than midnight on the third business day prior to closing and the borrower has agreed to this commitment, and 4) the « locking fee » cannot be calculated for a lockout agreement executed after midnight on the third business day at midnight before the third business day. Note that the definition of an « assessment commission » in the amendments (and in the processing regulations) seems to exclude any additional tax levied by a valuation company.8 Your interest rate is guaranteed only if you specifically require the lender to lock in your interest rate. That is why it is important. Remember, when you started exploring mortgage options, one of the most important things you wanted to know was interest rates. What is the rate today? Are there any points? What is my monthly payment? All the questions revolve around the interest rate. However, no matter what rate you see directly advertised or quoted, they really aren`t available to you. You have to block that rate. What happens if the interest rate is frozen before your loan closes? If the delay was out of your control, the lender can usually save a rate lock extension at no cost to you.
However, if your tariff ban has expired because you did not provide documentation on time or other items have been discovered that deny your blocking, lenders either offer an prevailing interest rate or renew the blocked rate, depending on the highest value. Changing attributes? The deal fails? The rate ban can be immediate. Lenders may have different rules for guaranteeing interest rates, but regardless of policy, they must be disclosed. This disclosure takes the form of the Lock/Float spleen agreement. One of the main conditions for locking in an interest rate is that a credit application be made to the lender. Many years ago, potential borrowers could call a few lenders and consolidate an interest rate over the phone and consider applying for the loan later. This option didn`t really last very long and few lenders played this game. What for? Because lenders take interest rates as seriously as you do.
Outdated interest rate bans can save lenders money. What can you expect from an interest rate freeze? The amendments seem to resolve many of these and other royalty issues. In practical terms, the amendments state: 1) residential mortgage lenders may charge « application fees, » « original fees » (or « points »), « locking fees, » « commitment fees, » « storage fees » and « discount points » (which reduce the interest rate on credit) (2) residential real estate brokers may charge « demand fees » and « brokerage fees, » lenders and brokers may charge fees to third parties that the department, by order-in-council or in accordance with a procedure established by the regulations, expressly authorizes any