The Ultimate Guide To Refinancing a Home

7
St ep Seven: Lock and Close
The final step is locking in a mortgage refinance rate and closing the loan. Locking a rate can
be done at any time during the refinance process. Until the interest rate is locked, borrowers
are said to be ?floating? their mortgages. Once a rate is locked, it is guaranteed until the lock
expires ? unless there are ?material? changes to the application, such as the borrower
choosing a different program or the home appraising for less than expected. Borrowers who
are floating their mortgages can check current mortgage rates before deciding to lock or
continue floating. At closing, the final costs of the refinance are reconciled to the costs
disclosed when the loan was locked. The actual costs cannot exceed the disclosed costs by
more than allowed by law or the lender has to absorb the excess.
Closing a refinance differs from closing a purchase. If refinancing a primary residence, there
is a three business day rescission period after the borrower signs the final documents. This
is a cooling off period in which the borrower can back out of the refinance for any reason.
Once that period expires, the refinance loan is funded and the old loan is paid off.
That s it !
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