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See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

Low appraisal, falling rates. Should the lender offer new terms?

Q: I locked in a rate. The property appraisal came in low, so I negotiated a lower sales price. Now interest rates have fallen again. Can I cancel the lock-in, get a lower rate for the smaller loan amount? These seem like two separate transactions to me, but the mortgage lender disagrees.

A: There's no "law" when it comes to a lock in. You can ask the lender to consider lowering the interest rate for you; they are under no obligation to do so but may. Of course, there is always the "nuclear option" of canceling the entire deal, but that can be expensive and burdensome, especially if the property is a short-sale or foreclosed home. You will need to decide if the loss of any fees you have paid and the hassle of restarting the process all over again is worth any small reduction in interest rate you might get.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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Q: How are mortgage interest rates determined?
AUG 18, 2022
A:

Mortgage rates fluctuate from day to day, depending on a number of factors related to the economy and to choices made by investors. While some mortgage money comes from deposits held by banks and credit unions, most of the funds for borrowers come from investors in capital markets.

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Q: Will today's stock market influence tomorrow's mortgage rates?
AUG 16, 2022
A:

Mortgage rates are influenced by a variety of factors, rather than moving in lockstep with any one economic indicator. The stock market rises and falls for a wide variety of reasons, including global, economic and political issues, but as a broad rule of thumb, a rising stock market indicates optimism among investors about the economy.

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Q: Should I pay private mortgage insurance out of pocket or finance the cost?
AUG 12, 2022
A:

For the most part, this is a discussion about time. You should compare the total costs of the difference in the two interest rates over your given time horizon.

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