Specialized Buyers Agent Answers Real Estate Questions

Q. This is a question we should know the answer to but don’t. How long is a rate good for when you get a mortgage approval? We put an offer on a house but the seller wants to delay the closing while they find something to buy. Our agent says that we may have to pay something to hold a good rate for more than 45 days. What should we do? Mr. & Mrs. Agnew, Paoli, PA

A. That is a point that many people forget about when they are making an offer for a home. In the past, lenders were willing to lock rates for 45 or even sometime 60 days without any extra fees. That was usually enough time for the transaction to finalize and close.
The typical agreement of sale used in this area provides that the buyer has to apply for a mortgage of the specific type they designate in the exact time they set forth. For example, the buyers agree to apply for a 30 year fixed mortgage at an interest rate between 4.5 and 6.5 percent within 10 days of the execution of the agreement. Then the mortgage commitment letter is due so many days after that. Sellers want to know that their house is really sold, so they do not like to wait a long time to find out if the buyers are able to get the mortgage they said they would apply for.

In your case, since the sellers are asking you to wait, they could pay the cost for the lender to commit for longer than the typical 30-45 days on the rate. The cost is usually a quarter of a point (¼ of 1 percent of the loan amount). But this charge has gone up recently. In New York City, for example, buyers pay up to 2 points to lock rates for more than 30 days. So it is a good idea to be sure you know what the cost will be before finalizing the offer.

The timing of a home purchase has many moving parts. The buyer may have a home to sell and the buyer of that home may have to give notice on a lease or need to be here for a job that starts some time in the future. School schedules, lender requirements, construction delays and many other things can impact the delicate balance. I always think of dominoes when I picture how all the timing needs inter-relate. It’s actually amazing how many houses change hands so smoothly!

 

 

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  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Hear from our Clients

  • "We were so pleased that a co-worker recommended someone in the area that she trusted. Boy, did we strike gold on all counts. You are amazing!"
  • "Instead of trying to take advantage of conflicts of interest, she puts the client's interests first."
  • "Linda is a hardworking, proactive and knowledgeable realtor. Throughout the process of finding and buying our new home, she was always responsive and kept us up to date on every detail."
  • "Linda and the group at Sage are the right fit. You won’t find more knowledgeable, prepared and professional agents."
  • "Linda and Tracey really know the Main Line area."
  • "Throughout the entire process we never doubted that she always had our best interests in mind. We wouldn’t consider anyone else when buying a home on the Main Line."
  • "From start to finish, Linda brought to bear a most helpful combination of experience, knowledge, attention and integrity on a somewhat complicated transaction. There was never any doubt that she represented our interests."
  • "Her knowledge of the area helped us quickly narrow our search and ultimately scored us an amazing home in an incredible neighborhood."
  • "It is hard to trust when you are not sure of the rules of the game. Working with Linda made us feel like we were family. Linda took her time to relay and explain everything in detail."
  • "Linda’s honesty and real estate savviness made for a wonderful home buying experience!"

Read more about what our clients have to say

Sage Buyer Tips

Use Sage Buyer Tips to research the Main Line and stay up to date on real estate news. This online destination is chock full of resources for buyers and sellers: you can see our Main Line communities or explore Sage favorite places. Browse properties here and search other Main Line real estate. With Sage’s advice and experience, first-time buyers and those looking to upgrade can find homes best suited to their needs.