Has anyone here used this company or know anything about their reputation?

Their lifetime rate protection seems enticing, but am I missing something in the fine print that makes this not desirable?

https://www.optimumfirst.com/rate-protection-guarantee/

Quote:

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Lifetime Rate Protection Guarantee Terms
The interest rate for the Lifetime Rate Protection Guarantee is calculated by taking the rate on the current Fannie Mae 30 year 30-day required net yield (RNY) rounded up to the nearest eight of a percent (.125%), at the time of lock, plus (+) a margin based on the loan amount (please see below). The current Fannie Mae 30 year 30-day RNY can be found by visiting www.fanniemae.com.
Loan Amount of New Mortgage
$0 - $124,999
$125,000 - $199,999
$200,000 - $299,999
$300,000 - Conforming Loan Limit
Margin
Not Applicable (N/A)
+2.5% (two and one-half percent)
+1.75% (one and three-quarter percent)
+1.5% (one and one-half percent)
Example:
If the 30 Year 30-day RNY is at 2% and the new mortgage amount is $350,000 then the Rate Protection Guarantee rate would be 3.5% (2% (RNY) + 1.5% (margin) = 3.5% Rate Protection Guarantee Rate). This is for example purposes only; the actual RNY can be more or less at the time of lock. The current Fannie Mae 30 year 30-day RNY can be found by visiting www.fanniemae.com.
Disclosure:
The Lifetime Rate Protection Guarantee will be treated as a mortgage loan refinance transaction and must meet current underwriting guidelines. Not all loans will be approved. The loan will be locked for a 30 day period and may be subjected to lock extension costs or re-pricing. All final calculations can be sent to you in writing. The Lifetime Rate Protection Guarantee is not applicable for cash-out loans in the state of Texas. In order to qualify for the Lifetime Rate Protection Guarantee you must supply your certificate from previous loan, be 180 days past your previous loan funding date, have a new loan amount greater than 125k, and the new loan must be a rate and term owner occupied transaction. Optimum First Inc. reserves the right to amend the terms of this guarantee at any time.

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This seems to be an alternative to the latest gimmick that if you take out a purchase loan with a lender they will refi you for "free" when/if rates drop. The issue with that statement is that free refi's have been done for years with what is called premium pricing. The premium is the extra profit that a lender will get for delivering a higher rate loan then market rate. That premium is then used to pay for closing costs on the refi. This can be a great approach if you plan on owning the home for a short time gong forward so your pay back period is immediate but your rate is higher. However, if you plan on owning the home for a long time going forward this is not the best option for you because you are not maximizing the potential savings even if you pay costs.

The problem with the marketing gimmick that I have seen out there is A) Any lender can do this B) there is not rate guarantee so the "free" refi can be very expensive because the rate is much higher then it would need to be.

So, the above spells out that margin so at least you know you are getting screwed. The 1.5% margin from the Fannie Mae survey is a HUGE margin. The premium price I laid above the rate would be maybe .5% higher, no where near 1.5% higher. So, give them credit for laying out how much higher then market they are going to give you then most selling this but man it is a VERY high rate compared to market.

That is what I sort of thought when I saw that 1.5% number. Thanks for clarifying and confirming!

Similar to how builders offer incentives for using their preferred lender. 9 times out of 10 they premium price the incentive plus a little into the cost of financing and you don't even know what hit you.