Bait-and-switch rate tactics
Frequently Asked Questions
Straight answers to the questions we hear most.
When inflation rises, central banks often raise interest rates to combat it. If you have a fixed-rate mortgage, your rate and payment are locked in and will not increase, even if new mortgage rates soar. You are effectively shielded from the impact of rising interest rates in the broader economy.
Switching lenders before closing is the process of terminating your mortgage application with one lender and starting a new application with a different one after your purchase contract has been accepted but before the final loan documents are signed.
Your new rate is determined by a simple formula: Index + Margin. The Index is a benchmark interest rate that reflects the broader market (like the SOFR or Treasury Index). The Margin is a fixed percentage amount set by your lender and added to the index. This sum becomes your new interest rate.
# Underwriting: The Lender`s Risk Assessment
This depends entirely on your lender’s policy. Some lenders may allow multiple recasts, while others may limit you to just one over the life of the loan. You must inquire with your loan servicer about their specific rules.
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