If you are in the market for a mortgage or are refinancing your home, please follow these tips:
- Take the time to compare rates and terms. The Massachusetts mortgage industry is very competitive with significant choice available. Be wary of a company that is offering rates significantly lower than its competitors.
- Confirm that your mortgage lender and broker are licensed. Both mortgage lenders and mortgage brokers must be licensed in Massachusetts. Verify that mortgage lenders and/or mortgage brokers are licensed by visiting the Division of Banks' web site for licensing information at http://license.dob.state.ma.us/licenseelist.asp or by calling 1-800-495-BANK (2265).
- Get your rate lock commitment in writing. If you choose to lock an interest rate, ensure that the rate lock commitment is in writing and that you retain a copy of the commitment. Ask whether the commitment is from the actual underwriting lender. Do not accept a rate lock commitment from a mortgage broker.
- Verify that your rate lock commitment is from the mortgage lender, bank, or credit union. Remember that only mortgage lenders, banks, and credit unions are authorized to issue rate lock commitments. Mortgage brokers are not allowed to issue rate lock commitments. A mortgage broker, however, can obtain/arrange a rate lock in writing from the actual underwriting lender. Ask your mortgage broker to provide you with a copy of the rate lock commitment from the underwriting lender.
- Provide all documentation to your lender or broker in a timely fashion. Throughout the mortgage application process, provide all required documentation to your lender or broker in a timely fashion and well before the rate lock expires.
- Contact your lender or broker often throughout the mortgage application process. Call your lender or broker regularly during the mortgage application process to verify that the transaction is progressing smoothly.
Remember, a lender is expected to honor a rate lock commitment if it expires through no fault of the borrower, regardless of whether a delay was caused by either the lender or by its agents. Go to the following link for more information on when mortgage lenders must honor rate lock commitments at www.mass.gov/ocabr/government/oca-agencies/dob-lp/dob-news-archive/2004-dob-news/rate-lock-regulations.html .
Immediately call the Division of Banks with any questions or problems regarding rate lock commitments at 1-800-495-BANK (2265) x 501. Contact the Office of Consumer Affairs' Consumer Hotline at 1-888-283-3757 if you have other consumer questions or complaints.