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A lock jumper describes a borrower who allows a lock on a mortgage to expire so as to lock to the latest rate.
The main reason why these event happen is because interest rates have declined between the time of the lock commencement to it’s expiry.
Because of this, a borrower understandably finds that it he would save more money by signing up for the latest interest rate instead of the one he is locked into.
When a loan is worth hundreds of thousands of dollars, even a 0.25% increase in interest rate can mean a lot of money in real dollars.
Lenders understand these actions that borrowers make.
And in an effort to avoid fallout, introduced mechanisms such as the lock and float feature which enables a borrower to take advantage of falling interest rates should it occur after a lock.
The term lock jumper is more often associated with refinancing borrowers rather than borrowers for new property purchases.