Forget 5-month-old mortgage rate lock

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Dear Dr. Don,
I’m refinancing my home and have locked in a mortgage rate of 5 percent for 15 years from the Federal Housing Administration. I locked in the rate last May, but the bank continues to drag its feet in settling the deal. The 15-year rate is now down to 4.375 percent annually. What recourse do I have in asking for a lower rate?
— Stanley Suspect

Dear Stanley,
I’m not sure why the bank is dragging its feet on closing your loan, but it’s highly unlikely that any rate lock agreement entered into in May is still effective in December. Work with your lender on this matter, because you should be able to lock in at current market rates.

The typical rate lock for an FHA loan is at most 60 days. You’re well past that time frame. You should be able to lock in at current market rates. The question of why it’s taking the bank this long to get to closing is a separate issue.

It’s not a matter of recourse; it’s a matter of time. Your initial rate lock agreement has most likely expired. If rates had moved higher, the lender would have increased the mortgage rate on your loan. Rates have moved lower. You should be able to benefit from that move.

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