Mortgage lenders and brokers use interest rate lock guarantees to insure you have time to close on the mortgage without the interest rate changing. How do you know the guarantee the loan originator gives you is the same the interest rate quoted by the wholesale lender? Loan originators commonly inflate their interest rates to receive an additional commission from the wholesale lender. Here are several tips to help you understand the interest rate guarantee provided by your loan originator.

There are two types of rate lock guarantees when you take out a mortgage loan. There is the written guarantee your mortgage company provides you and the guarantee the wholesale lender provides your mortgage company. These two guarantees may not be for the same interest rate. Your mortgage company may be adding a premium to the interest rate they are quoting you; mortgage companies commonly do this because they are paid a bonus for overcharging you on this rate.

When you receive a written rate lock from your mortgage company there are a several things to look for on this document. Make sure the interest rate, loan amount, lock date, expiration of the lock, and any points are all what you agreed. This rate lock means that your interest rate is only guaranteed with the mortgage company originating your loan. How do you know if the interest rate quoted by the wholesale lender has been marked up by the mortgage company? Ask them for a copy of the guarantee from the wholesale lender. Some loan originators stall or even refuse when you ask them for this guarantee; they are afraid you might find out they have marked up the interest rate. You can learn more about refinancing your mortgage without overpaying by registering for a free mortgage guidebook.