Question regarding locking a mortgage rate

[Robert T.]

Hi,

I am in the process of getting a 30 year mortgage for a rental property(20% down).  The current closing date is 4/21/2017.  Today, I was asked if I want to lock in my interest rate.   I was told it would cost $1644 to lock in a rate of 5.25%, and that the mortgage company would cover $650 of that amount.    I have bought 2 other rental properties in the past from this mortgage company and the cost to lock in a rate was no where near $1000.    I understand that rates can fluctuate and that interest rates are going up, but $1000 seems unusually high to me.   Is $1000 now the standard lock-in rate?

 Paying $1000 is so high I feel like I'm better off paying a little higher of an interest rate.  I asked what I would pay to lock in 5.5% and the person told me that it would be a violation for them to price that high an amount.   Is that really a violation?

Is this company overcharging me with this $1000 lock-in rate? Does anybody have any advice on what I should do?  Should I actually pay the $1000 to lock this rate in for 10 days?

Thank You

[Tyler Huntington]

Seems to me like you're talking to a snake oil salesman. Typically to lock a loan a lender (I work for a bank as a loan officer) will want a deposit to pay for bona-fide up front cost. Appraisal, credit report, flood cert. $1k is absurd. If your credit is in good shape, and doing conventional financing, your rate should be mid 4s, not mid 5s. I'd suggest you look around a bit. Rates have been coming down consistently the past 30 days. As I said, snake oil salesman. Good luck