# Rate Lock Options

How to read the rates displayed on this site.

The different columns show numbers that represent the points charged to guarantee the interest rate at the left of each rate sheet. In order to lock in to a certain rate the mortgage file must have “e-approval” first. That means that enough information must be provided to Harp Financial Mortgage Company upfront to run an electronic approval. If the rates drop after you are locked in by more than half a point in fees we can negotiate a new lower rate. If you cannot close within the lock-in period, it will cost you one eighth of a point per week to extend the lock-in beyond original time frame. The rates on most pages are updated daily.

Points are charged based on a given amount of time to guarantee an interest rate.

**Sample Rate Sheet with lock in periods explained:**

Rate | 21 Day | 30 Day | 45 Day | 60 Day |

4.250 | Lock after file submitted to underwriting or anytime after approval. | Lock prior to submitting the file to underwriting. Must close within 30 days. | Lock prior to submitting the file to underwriting. Must close within 45 days. | Lock prior to submitting the file to underwriting. Must close within 60 days. |

The first vertical column named “Rate” shows most of the current rates available.

The columns to the right named “12 Day”, “21 Day”, “30 Day”, “45 Day” and “60 Day”, is the time the the interest rate would be locked in and guaranteed. The number represents the “Points” that each particular interest rate would cost. Points means percent of loan amount as a fee. One point equals one percent. One and a quarter points equals one and a quarter percent of the loan amount. etc…

Each column shows the points that are charged for a given amount of time to guarantee the interest rate at the left.

7 Day not currently available due to volume.

12 or 15 Day lock-in is available after your loan is approved and you are basically ready to close. This is a good choice. It is our most popular lock-in choice, because it offers the lowest fees.

21 Day lock-in is available when file is submitted to underwriting but is not yet approved or you want to lock in a good rate and transaction will close within 21 days. This is our second most popular lock-in period.

30, 45 and 60 days would be useful in volatile markets or if you feel like locking in current program. Note once you lock-in, you are committed to the rate sheet as of the day that you lock in. You can take a higher or lower interest rate, but only pick from the rate sheet on the day that you locked in.

We have rate locks not shown including: 90 Days, 120 Days, 180 Days. The longer term lock-ins usually require a non refundable fee paid upfront to the lender. If for any reason your escrow does not close on time, you forfeit the upfront deposit.

Most common examples of points shown on rate sheets.

2.000 represents that you pay two percent cost (two points)

1.875 represents that you pay one & seven eighth’s % cost

1.750 represents that you pay one & three quarters % cost

1.625 represents that you pay one & five eighth’s % cost

1.500 represents that you pay one & one half % cost

1.375 represents that you pay one & three eighth’s % cost

1.250 represents that you pay one & one quarter % cost

1.125 represents that you pay one & one eighth % cost

1.000 represents that you pay one percent cost (one point)

0.875 represents that you pay seven eighth’s percent cost

0.750 represents that you pay three quarter’s percent cost

0.625 represents that you pay five eighth’s percent cost

0.500 represents that you pay one half percent cost

0.375 represents that you pay three eighth’s percent cost

0.250 represents that you pay one quarter percent cost

0.125 represents that you pay one eighth percent cost

0.000 represents that you pay zero points. (zero points)

-0.125 represents that you get one eighth percent rebate to you

-0.250 represents that you get one quarter percent rebate

-0.375 represents that you get three eighth’s percent rebate

-0.500 represents that you get one half percent rebate

-0.625 represents that you get five eighth’s percent rebate

-0.750 represents that you get three quarter’s percent rebate

-0.875 represents that you get seven eighth’s percent rebate

-1.000 represents that you get one percent credit (one point rebate)

-1.125 represents that you get one & one eighth % rebate

-1.250 represents that you get one & one quarter % rebate

-1.375 represents that you get one & three eighth’s % rebate

-1.500 represents that you get one & one half % rebate

-1.625 represents that you get one & five eighth’s % rebate

-1.750 represents that you get one & three quarters % rebate

-1.875 represents that you get one & seven eighth’s % rebate

-2.000 represents that you get two percent rebate (two point rebate)

The rebates or credit to you, all have a “-” minus sign in front.

A minus sign “-1.25” represents that we would give you a rebate of 1.25% of the loan amount. You would use that rebate or credit to help pay your closing costs. This is great for no closing cost loans. You may hear advertising for doing your loan for $500 flat fee or $995 flat fee or $1,500 flat fee. We offer all of those programs as well. The lender is using the rebate to pay a big chunk of your typical closing costs. It sounds like a “great deal” and it may be… but it is rare to get a “Free Loan”.

If the number is a positive number, for example “2.25” that means that you would pay 2.25% of the loan amount to buy that interest rate. It takes time to recover the costs of paying points. Yes your payment is lower and in many cases it may make sense to pay high points. We will explain the benefits and the negative aspects of paying points when you call at 818-878-9538.

It sounds complicated but is actually easy to figure out once we assist you over the phone. Call for a more detailed explanation. Although we include most of the daily point options, we would not want to pay more than 3.00 points nor would not need more than 2.50 rebate for most situations.

There are many options, but only a few are truly reasonable values on any given day. Every clients situation is different. We listen to your situation and help you narrow down the interest rate and payment that is best for you.

The rate sheets shown on this web site show just a small portion of the loan programs available to you. This page discusses rates and points. The points paid, if any, are in addition to the closing costs charged. Typical closing costs actually cost between $2,800 to about $3,500. We use $3,000 as a general rule of thumb when we discuss closing costs. It is usually within a few hundred dollars of being accurate for most transactions including purchases and refinances. When we give you a quote in writing we work on being as accurate as possible. We are in favor of the guaranteed closing costs program that is currently being researched by congress. The lender is required to give you an estimate up front. There is no requirement for disclosure of fees for the escrow company or title company.

Points are on top of the closing costs. Please keep that in mind when figuring out your quotes. Right now the zero point loans appears to be a reasonable option. Two points should be the limit you pay to buy down the interest rate. In the 1980’s 2 points was the standard. Recently using the rebate to pay all the closing costs was the trend for No closing cost refi’s, and reduced closing costs. Most banks still quote high points in the newspapers because they want to say they have the lowest interest rates. Not always a great option for the consumer. There is a reason that banks have big buildings. They make money! Call and we will design a custom loan for your situation. That’s all we do.

No matter which interest rate or points you pick Harp Financial Mortgage Company earns a maximum flat fee of 1.00% and all rate sheets include our retail pricing. We share all excess rebates, bank paid bonuses and credits with our borrowers.

No APR quoted, but available upon request for ANY of the rates shown. We will fax to you a Good Faith Estimate and Truth in Lending Form. To be totally accurate the APR can only be calculated based on your Specific Loan Amount and the Final Closing Statement. Any change to closing costs or loan amount affects the APR. The higher the loan amount the LOWER the APR. We do not recommend making final decision on lender based on APR, it is a flawed although well intentioned law and it is often wrong. The initial Truth-In-Lending estimate is often slightly different than the final APR. The better the estimate the more accurate the APR. The extreme examples of the lowest rate with a 180 day lock in is 1.125% above the note rate shown. The 12 day lock at the zero point loan is about one eighth of a percent higher than the note rate. If you take a higher interest rate with a rebate to you, the APR can actually be less than the note rate.

Harp Financial Mortgage Company is located in Calabasas, California. We are a Southern California Mortgage Broker, but we originate home loans in Northern California and Central California too.

Most of our business is centered in the surrounding Metro areas of Los Angeles, San Francisco and San Diego. The application takes 10 minutes by phone. All of the vendor services including escrow, title insurance and the appraiser are located in your city or nearby. We have an extensive list of the companies that we trust that are located near you. You can also recommend your own favorite escrow company or licensed appraiser.

Common Mortgage Terms used to describe fees

% = Percent

Points = Percent of loan amount

Percent = Loan amount divided by 100

Basis Points = One point divided by 100

BP = Basis Points

Bips = Basis Points

Tick = 1/32nd of one percent.

Ticks = More than one 1/32nd of one percent.

Overage = Rebate paid by lender in excess of one percent

Rebate = Fee paid by lender to originator

Yield Spread Premium = Rebate

YSP = Rebate

Origination Point = Fee earned by originator

Discount Points = actual cost charged by lender