What Fox Business News Gets Wrong About Home Loans
April 17, 2024
There is plenty of bad information about home loans in general and FHA loans specifically. You may encounter some of these “in the wild” when searching for a lender and a home to buy with an FHA mortgage.
What kind of bad information? Everything from home loan basics to persistent myths about the nature of the FHA loan program.
For example? Some borrowers wrongfully assume the FHA loan program has need-based maximum income requirements or that it is only for first-time home buyers. Neither of these things is true.
Some news outlets report on home loans in general and FHA loans specifically as part of their personal finance sections and related content. But it’s easy to get the details of this program wrong, as we’ll explore below.
What Fox Business News Gets Wrong About Mortgages
In April 2024, Fox Business News published an article titled, Today's 15- and 30-Year Mortgage Rates Rise and listed several facts about mortgages. The article includes the following, quoted verbatim:
“A mortgage rate lock lets you lock in the current mortgage rate for a certain amount of time — often between 30 and 90 days. During this time, you can continue shopping around for a home without worrying about the rate changing.”
Do consumers really apply for a mortgage rate lock while they are still uncommitted to a specific house purchase?
What Investopedia Says
Investopedia notes that where the timing of mortgage rate lock commitments is concerned, “Mortgage locks generally last for 30 to 60 days. At a minimum, they should cover the period necessary for the lender to process your loan application.”
And when does Investopedia believe the mortgage application should happen?
“Once you are under contract to buy a specific property, your lender will initiate the mortgage application.“
What CFPB Says
The Consumer Financial Protection Bureau (CFPB), the government website discussing personal finance issues, notes the following about the timing of a rate lock:
“A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application.”
Note that CFPB says a rate lock is meant to be used between the specific offer you make to purchase a home and closing day.
This suggests that consumers are not meant to use a mortgage rate lock while still deciding on the right house to buy with the FHA loan or other mortgage options.
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RELATED VIDEOS:
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Don't Forget Your Closing Checklist
Your Home Loan is Called a Mortgage
What kind of bad information? Everything from home loan basics to persistent myths about the nature of the FHA loan program.
For example? Some borrowers wrongfully assume the FHA loan program has need-based maximum income requirements or that it is only for first-time home buyers. Neither of these things is true.
Some news outlets report on home loans in general and FHA loans specifically as part of their personal finance sections and related content. But it’s easy to get the details of this program wrong, as we’ll explore below.
What Fox Business News Gets Wrong About Mortgages
In April 2024, Fox Business News published an article titled, Today's 15- and 30-Year Mortgage Rates Rise and listed several facts about mortgages. The article includes the following, quoted verbatim:
“A mortgage rate lock lets you lock in the current mortgage rate for a certain amount of time — often between 30 and 90 days. During this time, you can continue shopping around for a home without worrying about the rate changing.”
Do consumers really apply for a mortgage rate lock while they are still uncommitted to a specific house purchase?
What Investopedia Says
Investopedia notes that where the timing of mortgage rate lock commitments is concerned, “Mortgage locks generally last for 30 to 60 days. At a minimum, they should cover the period necessary for the lender to process your loan application.”
And when does Investopedia believe the mortgage application should happen?
“Once you are under contract to buy a specific property, your lender will initiate the mortgage application.“
What CFPB Says
The Consumer Financial Protection Bureau (CFPB), the government website discussing personal finance issues, notes the following about the timing of a rate lock:
“A lock-in or rate lock on a mortgage loan means that your interest rate won’t change between the offer and closing, as long as you close within the specified time frame and there are no changes to your application.”
Note that CFPB says a rate lock is meant to be used between the specific offer you make to purchase a home and closing day.
This suggests that consumers are not meant to use a mortgage rate lock while still deciding on the right house to buy with the FHA loan or other mortgage options.
------------------------------
RELATED VIDEOS:
Sometimes It Pays to Refinance
Don't Forget Your Closing Checklist
Your Home Loan is Called a Mortgage
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