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How to Price a Lock & Shop Rate with Float-Down Option

A Lock & Shop Program interest rate lock is priced on the current 90-day pricing. The borrower must supply the fully executed purchase and sales contract within 60 days of participating in the program. If not under contract by the 60th day, the lock is subject to cancellation. Any extension on this requirement is on a case-by-case basis.

Lock & Shop Rate Guidelines and Restrictions

• The property address must be marked as TBD (To Be Determined) status.

• This program only applies to Doorway Home Loan using Conventional, FHA, USDA and VA conforming loan programs for 1-4 family dwelling units and excludes high-balance loans, second liens, investment properties, refinance loans, renovation loans, non-purchase money home equity lines of credit, interim construction loans or other temporary financing, loans brokered to or by Doorway Home Loans, loans involving short-sales, or any other purchase contract that requires the approval from a third party (e.g., a lender, relocation company, etc.).

• Should the loan amount increase over standard conforming and government loan limits, the loan will be repriced at the high balance/Jumbo loan at the current market price.

• The borrower must supply the fully executed purchase and sales contract within 60 days of participating in the program. The effective date of the purchase contract cannot be prior to lock date.

• Credit, income, and asset underwriting pre-approval are required prior to qualifying for the Lock & Shop pricing option.

• The Lock and Shop option may only be exercised one time and is not valid until this agreement is signed by all interested parties on the transaction.

• Float down option is available only for one time once the purchase contract/agreement has been signed and loan application has been received. There is a 25bps cap in rate given there is a 1 point or 100bps improvement in price. If the lock expires or is not closed within 30 days from the time of the float down, it will be subject to worse-case pricing upon relock.

• The float-down option may not be transferred to another rate-lock, borrower, property, or loan program.

• As applicable, lender pricing credits do not apply, and Doorway Home Loans will only improve pricing by improvements to the interest rate at the time of the float-down option.

• Only one 15-day extension will be offered at a cost of 2 basis points per day, for a maximum of 15 days. Upon expiration of the extension period, if the loan has not yet closed, the lock will be invalid and will require a new lock, subject to worse-case pricing. 

• Unforeseen circumstances adversely affecting the ability to perform will void Doorway Home Loan’s obligation under this Program (natural disaster, inclement weather, catastrophic event, or other major events beyond Doorway Home Loan’s control). 

•Increasing loan size by more than 10% of the original locked-in loan value, may result in pricing adjustments. 

•The program may be amended or terminated at any time except for qualified home purchasers with submitted applications prior to the date of the amendment or termination. The Program is not transferable or assignable. 

•This agreement is based upon current guidelines as of the day of the rate lock and does not constitute a commitment to originate or arrange a mortgage loan. Closure of this loan is subject to final underwriting loan approval. 

•This lock may be withdrawn and voided without notice, and at the sole discretion of Doorway Home Loans in the event of changes in circumstances, including but not limited to, loan program, investor guidelines, and/or your financial condition changes.

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