Mortgage lender and digital financial services company guaranteed rate Court builders and lenders with their newly launched programs – the Lock ‘n’ Sell Rate Lock Program and Forward Commitments – by helping borrowers secure lower mortgage rates.
Thank you for reading this post, don't forget to subscribe!The rate lock program allows builders to lock in the prevailing rate on individual homes for up to 120 days. In an announcement about the launch, Guaranteed Rate said it does this before there is a buyer to protect payments from rising in the current rate environment.
The Lock ‘n’ Roll program is eligible for conventional and government fixed-rate loans with a minimum lock-in period of 60 days, according to its website. The loan program cannot be extended, re-locked or renegotiated until the lender has received a fully executed sales contract and is eligible for only one 30-day extension.
Jim Colella, Guaranteed Rate’s national builder program manager, said the program was launched to “take the guesswork out” for customers and ease concerns about changes in the market affecting their ability to purchase a home before construction is complete. was started to do.
Alternatively, builders with a large number of homes can take advantage of forward commitments – which allow builders to reserve between $3 million and $20 million in blocks of mortgage loans at low-interest rates for up to 150 days. enables, said the Chicago-based lender.
The guaranteed rate said that instead of lowering the price of the home, borrowers can take a lower monthly mortgage payment by lowering the rate.
“By maintaining initial asking prices, builders can help maintain prevailing values in the neighborhood and ensure appraised values for buyers,” the company said in a statement.
With 466 branches nationwide, the lender has more than 1,910 active loan officers, according to Mortgage Data Platform. modex, Guaranteed rates generated $34.38 billion in volume in 2022, a 56% decrease from the previous year’s $78.13 billion. About 71.2% of its transactions were from buy and 27.1% from refs in 2022.
While rates have been on a declining trend since peaking in October, they are still well above the 3% level through 2021. Buyers are expected to continue to be weighed down by affordability challenges, despite a deceleration in home price growth and reduction in rates.
In turn, mortgage companies are betting on programs that lower mortgage rates to unlock buyers on the sidelines.
Products such as builder- or lender-financed floating rate buyouts and ‘buy now and refinance later’ programs, which waive closing costs or appraisal fees, are picking up steam against the backdrop of a higher rate environment.
