Locking in mortgage rates

Willyboy

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Aug 19, 2016
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#1
Hello everybody.

Does anyone know whether you can lock in a mortgage rate with several banks at the same time?

I know when they check your credit score they will see who else checked on you and that's why I was wondering about that.

Thank you.
 

Tina Myrvang

Client Care Specialist
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#2
Hello Willyboy,

Pre approvals only last 120 days then you must close to get the rate. You shouldn't only be looking at rates. What are the prepayment options and percents. Can you double up once a year. How flexible is the mortgage based on your goals.

You can lock in with as many banks as you want but you will risk lowering your credit rating by too many banks pulling your credit report.

Have a great day.
 

David Wilson

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Oct 26, 2017
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#3
What is your objective WillyBoy? Are you looking to refinance a mortgage or open a new one? I'm not seeing the advantage of having rates locked in at several lenders. Ultimately I would assume you are going to take the best deal offered that meets your individual needs. You can apply at as many lenders and as many times as you like. However, as Tina mentioned having your credit report pulled (accessed) by a lender reduces your credit score slightly with each inquiry. Lenders will generally ask about the inquiries to determine their purpose and if a debt has been opened related to the inquiry that may not be showing up on your credit report. This is to ensure they have your full financial picture and debt load when making their underwriting decision (approval or rejection).

If you're worried about the lenders questioning the inquiries there is no need to worry just be open and honest with the lender about their purpose and result. Example: if you are rate shopping, just tell them you are rate shopping. It's actually better for you if the lender knows you are looking into multiple options as they will be more likely to be flexible with their terms (including rate) to be competitive.

If I know what you are trying to accomplish then I can be more specific with my feedback.

Cheers,
 

Willyboy

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Registered
Aug 19, 2016
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#4
Thanks for the replies.

For two main reasons I'm looking to lock in at different banks. The first one being the mortgage brokers I got in touch with the last few month are great but they said they can't hold a mortgage rate for me if I'm buying rentals and the rates are going up so dealing with a mortgage broker will put me at a disadvantage in this regard. So far since I contacted them the rates have gone up 70 points.
The second reason is the brokers told me as well I would have to accept a higher mortgage rate if also buying a rental.
So what happened is I contacted the two banks where my bank accounts are and asked them about that and their answer was they will lock in a rate whether for a regular home or rental and also they said they won't increase it if I decide to buy a rental.
So I came to a conclusion that since we are now in a rising rate environment I'm better off to go with a bank but because they have maybe different conditions I better lock in with a few of them now before the bank of Canada raise the rate again next week or after and after that I will have between three to four months to review what each bank is offering and try and act accordingly.
 

David Wilson

New Forum Member
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Oct 26, 2017
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#5
It sounds as though this process has been going on since at least the beginning of summer for you? Seems on the lengthy side for time to purchase a property, are you 100% ready to buy? You could do more damage then good if you are on the fence and trying to lock in a rate 'just in case'.

I get wanting to protect against future rate increases just be careful that don't push the rate up yourself by lowering your credit score with inquiries. Lenders sometimes have rate brackets that individuals fall within based on a number of factors one of which is usually credit score. A small drop in credit score from an inquiry may not seem like a big deal (and usually it isn't) it can however, push you into a different rate bracket if you were already on the borderline or you've had a large number of inquiries.

I fully agree with reviewing options from multiple lenders I would just make sure you're 100% ready to make the purchase in order to avoid time flying by and having to then re-apply again. At the end of the day you really only need to concern yourself with the best deal; the fact you have pre-approval at other lenders makes no difference.

Also understand while you may get pre-approved there is typically a period of time that a credit report is good for. The pre-approval is not a guarantee and depending on the amount of time that has past from pre-approval to seeking final approval the lender may pull your credit report again. This is because your financial situation can change drastically in a short period of time. You could have filed for bankruptcy for all they know within that time frame or opened a bunch of new credit. Lenders can use any number of reasons to no hold to their "locked in" rate most commonly something has changed on the credit report / credit score from when the pre-approval was obtained. It's a good idea to ask the lender how long the credit report is good for before they have to pull another one for final approval. This is really the only true 'lock in' period.

Cheers,
 

Tina Myrvang

Client Care Specialist
Staff member
REIN Member
Nov 15, 2010
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#7
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Willyboy

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Registered
Aug 19, 2016
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#8
Thanks again for the advice and information. I'll try and figure out what to do in the next few days or weeks.