Choose a loan offer
You’ve compared and fine-tuned your offers. Now it’s time to make a choice and notify the lender.
What to do now
Contact the lender you choose to tell them that you are ready to proceed with your application
If the lender has given you more than one Loan Estimate, make sure to be clear about which loan you want to proceed with. It’s a good idea to run through the key terms with the loan officer to confirm that everyone is on the same page.
If you haven’t already, consider locking your interest rate
Locking your interest rate protects you in case interest rates go up between now and closing. Some lenders may have already locked your rate at the Loan Estimate stage, but others may require that you express your intent to proceed before locking your rate. Check at the top of page 1 of the Loan Estimate to see whether your rate is locked, and until when.
Start gathering and updating your documentation
In the next phase, you’ll submit documentation of your income, assets, and employment and work with your lender as they process your loan application.
What to know
Getting a Loan Estimate doesn’t mean you’re committed to a lender
You don’t have to move forward with a Loan Estimate if you are not happy with it. In fact, you’re not committed to any lender until you sign the final closing documents. If you don’t plan to proceed with a particular lender, you can notify the lender or just let the Loan Estimate expire.
Loan Estimates can expire
If you don’t express your intent to proceed with a particular loan offer within 10 business days from the day the lender sends you the Loan Estimate, the lender may close your application as incomplete. If you later decide you do want to proceed with that lender, you may need to start the application process over.
You may be asked to pay a loan application fee or an appraisal fee in order to proceed with your application
Application and appraisal fees are often charged when you express your intent to proceed. These fees may or may not be refundable if you decide not to move forward with that loan.
How to avoid pitfalls
Make sure that you can reasonably expect to close before your rate lock expires
If you don’t close before your rate lock expires, you may have to pay a fee to extend your rate lock. If you’re concerned about closing in the rate-lock timeframe, ask the lender what your options are. Can you change to a longer rate lock now? At what cost? What is the lender’s policy on extensions?