Make Sure Your Rate Quote Covers Your Time Requirements.

Another rate quote trick involves how long your rate is good for. When you get a rate quote, you're getting the rate for that very moment. If you need a rate six months from now when your new home is completed, then it's likely that the rate you get today will no longer be available. Rates will be either up or down.

You must decide not only on the loan program, but also on how long you need to guarantee, or "lock in," that rate. If your home is closing in 30 days, you'll need a 30-day quote. If it's closing in two months, you'll need a 60-day price.

The longer you extend a rate lock, the more it will cost you. For each 30-day period, it will usually cost you 1/4 point. If you want 5.00 percent for 30 days, your loan officer might ask for 1/4 point. If you want the rate for 90 days, you may be quoted "5.00 percent at 0.75 point."

What if you haven't found a house and you just need a quote? If you don't watch out, you'll be fooled again. Another loan officer trick is the "today's rate" quote.

"Hi, what is your rate for a 25-year fixed-rate mortgage?"

"My rate is 3.00 percent today with no points."

"Wow!" you say. "That's great!"

"But, I can't guarantee you that rate until we have an application from you and we've received your application fee of $300. If I had your loan right now, we could get that for you," says the loan officer.

So you rush around, maybe go to the bank's Web site, give the bank a check or credit card number for the $300, then call again.

"Okay, I did what you wanted. I would like to lock in that 3.00 percent rate."

"Oh, bad news. Our rates just went up. I can get you 4.00 percent right now if you'd like."

"But other lenders are quoting 3.50 percent. I want my application fee back," you protest.

"Oh, I'm sorry. Those application fees are nonrefundable; it says so on our Web site and the disclosure you signed. Hey, maybe I can have the boss waive our processing fee to make it up to you. We can do that when you go to closing."

Did you follow all of that? Did you see how the borrower was led astray and now must use that lender or else lose $300? It happens all day long.

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