Can I lock in a mortgage rate before an appraisal?

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I’m in the midst of buying a property in California (San Jose); my bid has been accepted, and I’m in the contingency period. I’d like to get the loan details set fairly quickly. I’ve been told that I get the rate locked after I get the appraisal done (the seller, on my request, is putting in new flooring, which has to happen first; however, I’m confident the location is worth the amount of my loan). However, I heard elsewhere that you can lock in rates before the appraisal is complete. Is this true? and if so, is it recommended?

  1. Reply
    Cheryl G
    May 3, 2011 at 6:15 am

    The interest rate should not be tied to the appraisal at all. It’s usually in your best interest to lock in a favorable rate as soon as you’re qualified.

  2. Reply
    May 3, 2011 at 6:34 am

    You can absolutely lock the rate prior to the appraisal. Obviously if the appraisal does not come back supporting the value there will be several other issues.

    There are plenty of reputable brokers who will lock a loan without having the appraisal completed first and please make sure that you DO NOT pay an application or lock-in fee. There are plenty of brokers who do not charge them. (Fair disclosure – I am one.)

    Given the volatile nature of the mortgage industry it is a very good idea to lock as soon as possible – before the terms and programs change again. Plus, a good broker can lock with one lender and watch the rates – going with a different lender if the rates go down and staying with the locked lender if rates go up.

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