I've heard you can relock your rate before closing if the rates drop. Is this true?
Yes. If you locked in your rate when rates were at 5.25 to 5.5 percent, and you’re about to close when rates have come down to 4.5 percent, you can go to your bank and say that you know rates have come down and you’d like yours relocked.
Can’t believe a bank would compromise on your rate? They want your business! The bank doesn’t want to lose your loan to a competitor, who would benefit from the origination fees and other income generated from your mortgage, so the bank will often split the difference or at least lower your locked rate by some degree.
It won’t be the lowest rate out there, and not every bank will do it, but you can certainly ask. Remember: This is all tied to your original lock, so you’ll still have to close on the house by the time you’re scheduled to under the original lock.
Nestpert Jeff D. Opdyke, author of Financially Ever After: The Couples’ Guide to Managing Money
See More: Buying a Home