Rate Holds

Pre-Approval = Rate Hold

A Pre-Approval isn’t a Rate Hold

A Rate Hold isn’t a Pre-Approval

A Pre-Approval is an estimation of the amount of mortgage money a lender will loan you.

And it is executed to varying degrees of accuracy.

You click some buttons online to generate your Pre-Approval - garbage in, garbage out.

You engage an expert and put yourself through the proper in-depth process - you will get an accurate Pre-Approval

A rate hold is an addition to a Pre-Approval

A Rate Hold is an insurance policy — a worse case (rate) scenario protection — valid for 120 days.

Those lenders that do offer rate holds do NOT offer their best rates. Why?

1)        They cost lenders money to issue therefore not all lenders issue them.

a.        Overhead cost of issuing (technology and labor)

b.        Having to hold the funds aside that they’ve promised in a Rate Hold - whilst they’re being held they don’t earn interest.

2)        Mortgage money is available in three overarching categories – Uninsured, Insurable and Insured. Insurable has sub-categories defined by Loan to Value.

Rate holds are simplified and not offered in each (sub-)category

Why do I still obtain a Rate Hold then?……just in case!

When you have an Accepted Offer – there is zero obligation to use your Rate Hold – that is when you can consider all (20+) lenders.

‘Fun’ Fact: less than 5% of Rate Holds actualize and become Mortgages!!

Best rates are available on IRL files

aka Purchases with Accepted Offers, Refinances, Renewals