Home loan interest rates change on a daily basis. They can change more than once
a day. When you get a quote, it becomes your "rate" once you "lock in" with your
selected lender.

A "lock-in" is a promise (usually in writing) to close your loan at a certain interest
rate and points. You should have a lock-in agreement with clearly defined terms.
These terms include expiration date, interest rate and points paid by buyer and seller,
and they usually include the expectations you should have of your lender as well as
those they have of you.

It is important that you know your lender's strength and reputation. The promise
offered to you is made more valuable by these two. Once you read this disclosure carefully and agree to the conditions, be sure you have a fully accepted and
executed copy of your files. This is your contract with your lender and protects your interest rate.

A point is an amount equal to one percent of the principal amount of a loan.
When you receive your quote, you will notice that it comes in three parts.
For example, 8 ½ percent, 1 ½ plus 1.

8 ½ percent is the interest rate your mortgage note will carry. This is where you will
make your payments, amortized over the years you select (15 or 30 years).

1 ½ are discount points. One discount point equals 1 percent of your loan balance.
For example, this is $1500 on a $100,000 mortgage. This money is paid at your
closing directly to the investor who lends money. This gives the investors what they
want to earn on this investment, along with the 8 ½ percent you pay on the mortgage.

The past of the quote (1) is the origination fee. It is 1 percent of the loan balance and
is what your lending company collects for their work. This amount can vary. In some
areas of the country, this discount points and origination fee are added together when
you receive a rate quote.