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When shopping for a mortgage, the lender may give you a quote for the mortgage interest rate and points (additional fees charged by the lender usually paid at closing by the borrower). These only represent terms available at the time of the quote. They may not be available by the closing date (which may be weeks or months in the future). To ensure the rate and points are the same at closing as they are when quoted, you'll need to lock-in the interest rate (also known as a rate lock or rate commitment).

Obtain a Written Agreement

Most lenders will commit, in writing, to a mortgage interest rate for a specified time period while your loan application is processed - this is known as "locking-in" the rate.

If you elect to lock-in an interest rate, it is best to deal with a lender who provides a written lock-in agreement. Be sure to read this agreement carefully, some lock-in agreements become void due to actions beyond your control - such as a change in the maximum rate for VA-guaranteed loans.

Lock-in Options

The following lock-in options are common among lending institutions. Be sure to ask the mortgage lenders you are considering which lock-in options they offer.

• Lock-in interest rates and points.
  This will give you a clear understanding of how much your mortgage will cost. Neither your interest rate nor points increase during the lock-in period. This protects you against rising market conditions.

• Lock-in interest rates and floating points.
  Your interest rate is locked-in and will not change for the lock-in period, while your points may rise and fall with market conditions. With this option, your lender may allow you to lock-in the points at the current market condition some time between submitting the loan application and closing.

• Floating interest rates and floating points.
  This gives you the option to lock-in the interest rate at some time between submitting the loan application and closing. This puts you at risk if interest rates and points rise and may not be best for a homebuyer with a tight budget.

The Cost of Locking-in the Rate

It is not unusual for a lender to charge a fee for locking-in an interest rate and points. This fee may vary depending on the amount of time you want to lock-in the rate (the lock-in period).

The fee may be charged when you lock-in the rate (and is rarely refundable if you withdraw your application, if your credit is denied or if you do not close on the loan) or it may be included in your closing costs. The amount of the fee and when it is charged will vary among lenders.

The Lock-in Period

Most lenders will offer lock-in periods of 30-60 days. Some lenders may only have short lock-in periods. And still others may offer a longer lock-in period (expect higher fees for longer lock-in periods).

The lock-in period should be long enough for the loan approval process and to allow for any other contingencies that may delay closing.

The Lock-in Expiration Date

If unexpected circumstances prevent the loan from settling prior to the last day of the lock-in period (whether caused by you or others in the process - including the lender), you lose the interest rate and points that were locked. Prevailing interest rates and points are usually charged under these circumstances. Be sure to ask your lender before you lock-in what interest rates and points will be charged if the loan is not closed before the lock-in period expires.

Hazel Sun Winter Park Florida Real Estate

Hazel Sun can find your Dream Home!

As an expert on Winter Park Florida real estate, I keep track of every home for sale in the area. In many instances, I know of homes that aren't yet listed on the area Multiple Listings Service (MLS). If you will fill out the form below with as many details as possible, I will search my data for homes that meet your needs and budget. Then I'll send you the information, free of charge!

The Multiple Listing Service (MLS)

What is the MLS, and how does it work for you? The Orlando real estate MLS is a database of properties currently on the market in the area. Brokers participating in the MLS (which includes virtually all Brokers in the area) list all the homes they have for sale and agree to share in the sales commission of the properties. This means that if I list your property on the MLS for you, but another agent finds a buyer for your house, that other broker or agent is entitled to part of the commission. The big advantage to you, as the seller, is that every single broker and agent participating in the MLS has an incentive to sell your home. This effectively puts every agent in the area to work selling your home! The first place a buyers agent looks is always the MLS. There is simply no better way to gain instant and widespread exposure for your home than listing it on the MLS.

So, the first thing I'll do as your agent is get your home listed on the MLS! When another agent is searching for a home to meet the needs of a buyer, the agent will search the MLS based on the buyers criteria for price range and features. So I'll enter all the important information about your home, such as the size, number of bedrooms and bathrooms, and any special features. I'll also take photos of your house and include them with your MLS listing. Agents and buyers alike are always more likely to look at listings with photos.

Holding Title

Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).

The following information is supplied for informational purposes and should not be relied upon as legal definitions.

Buying Alone

• Sole Ownership
• A single individual who has not been legally married.
• An unmarried individual who was married and is now legally divorced.
• A married individual who wishes to acquire title in his or her name alone. At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.

• Living Trust
  A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate. The individual transfers ownership of his or her property and assets into the trust.

Buying with Others

• Tenancy in Common
  Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
• Who can take title? Any number of individuals.
• Ownership Division: Any number of interests, equal or unequal.
• Who holds title? A separate legal title to his undivided interest is held by each co-owner.
• Possession: Equal right of possession.

• Joint Tenancy
  Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
• Who can take title? Any number of individuals.
• Ownership Division: Interests cannot be divided.
• Who holds title? There is only one title to the whole property.
• Possession: Equal right of possession.

• Community Property
  Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
• Who can take title? Only a husband and wife.
• Ownership Division: Interests are equal.
• Who holds title? Similar to title being in a partnership, title is held in "community."
• Possession: Equal right of possession.

Additional Ways to Hold Title

• Corporation
  A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.

• A Partnership
  A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.

• A Trust
  A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.

Hazel Sun

Types of listing contracts
A listing contract is an agreement between you and a licensed real estate broker authorizing the broker to represent you in selling your home. By far the most common type of listing contract is the “Exclusive Right to Sell”, but there are several other types. 

Exclusive Right to Sell Listing
This is the most popular type of listing with sellers and brokers.  Under a right to sell listing contract, the broker is the only one authorized to sell your home.  If another agent finds a buyer, your broker earns a commission.  If you find a buyer on your own, your broker still earns a commission.  This arrangement gives your broker the most incentive to spend time, money and energy marketing your home.  Especially to the other agents in the area who can show your home to their buyer clients.  Only with an exclusive right to sell agreement can you expect to get a full service marketing effort from your broker, since it is the only listing type that assures a broker will get paid for his marketing expense and efforts when the home sells.

Exclusive Agency Listing
This is similar to the right to sell listing, with the significant difference that you reserve the right to sell your home yourself and not pay the broker a commission.  The broker only gets paid if your home is sold through a licensed real estate professional.  If you find your own buyer and sell the home yourself, you pay no commission.  On the face of it, this might sound like an attractive arrangement.  But it's not a popular listing type with brokers, and for good reason.  Under an exclusive agency agreement, the broker is exposed to the risk of putting forth considerable effort and expense marketing your home, only to come away empty handed.  The attraction to the seller of this type of contract of course, is the possibility of finding their own buyer and not paying a commission.  This puts the seller and broker in competitive roles, which usually isn't in the best interest of either party.  Since the broker stands a good chance of not reaping any reward, it's unlikely that any effort or expense will be put into marketing an exclusive agency listing.

Open Listing
The open listing is a non-exclusive contract.  It gives the broker permission to show potential buyers your home, and the broker will only earn a commission by bringing in a client who buys the home.  Since the open listing isn't exclusive, sellers can sign these listing agreements with as many brokers as they want.  The bottom line with an open listing is that no broker has any incentive to market the home at all.  They won't even place the home on the local MLS service with an open listing.  Further, it's up to the seller to field all phone calls and coordinate all showings etc….  Generally, the only people who use open listings are FSBO's (for sale by owner) who are willing to pay a partial commission to an agent for finding a buyer.  You shouldn't expect any marketing or advertising at all with an open listing contract.

Showing Listing
Also called the “one time” agreement.  This is an agreement whereby a FSBO agrees to let an agent show the home to an interested client and pay a commission to the agent if that showing results in a sale.  The purpose being to prevent a seller from letting an agent show the property, then deal directly with the client, to avoid paying any commission.

Hazel Sun