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Old 05-19-2011, 10:01 AM
 
7 posts, read 90,184 times
Reputation: 29

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We locked a rate end of last week. However, yesterday we got some information on getting a mortgage through our credit union that would offer a very slightly lower rate, but some customer service things that sound good to us, such as they do not sell the loan to another company and the customer service people you deal with are local to us. We haven't paid our broker anything or signed anything, just picked up papers to sign and fill out today.

Is it okay to change after we have locked? The lender we've locked with is a nice person, but we like the other option of the loan not being sold and dealing locally. Not sure if changing is just business, so to speak, or if it is truly not very nice. Thank you.
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Old 05-19-2011, 10:33 AM
 
Location: Boca Raton, FL
5,663 posts, read 9,276,002 times
Reputation: 7449
Smile Locking a loan

Daphne,
Your current company that locked the loan has secured a position for your loan and will be penalized if your loan does not close with them.

By locking a loan and not closing, you would be putting that person in a situation that might harm their ability to do business with that lender.

Rates have improved but ask them about their float down policy. Always be upfront with your loan originator and they may be able to match the credit union.
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Old 05-19-2011, 11:52 AM
 
Location: PA
6 posts, read 52,131 times
Reputation: 10
Most lenders have a renegotiation policy, so it's worth asking. they made a good faith effort on your behalf, and at least deserve a shot to retain the business. And don't be to hasty to jump ship, too. You could do so today for .125% in rate, and rates could drop again and now your broker might be .125 lower than the CU.

In the end, though, your comfort and financial peace of mind comes first.
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Old 05-20-2011, 05:51 AM
 
Location: Wake Forest, NC
835 posts, read 3,736,430 times
Reputation: 648
Locking is like marraige- "for better or worse"....... If rates went up would you not be mad if the lender called you and said-" I know we locked but rates went up so we are raising your rate".
This is essentailly what you are telling the lender-" I know I locked with you and you committed a rate to me no matter what the market did , but I can get another .125% elsewhere- see ya"
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Old 05-24-2011, 10:11 AM
 
Location: Plano, Texas
1,675 posts, read 6,615,236 times
Reputation: 693
is it illegal or can you be penalized...no. Is it the right thing to do...no. When people lock with a lender but then change lenders due to rates dropping, that causes fallout and higher costs to the lender. Those higher costs are passed down do the next consumers which increases costs for all of us.
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Old 05-29-2011, 08:29 PM
 
Location: MID ATLANTIC
8,140 posts, read 19,989,830 times
Reputation: 9382
Should market conditions improve to a point that makes quite the difference on someone's most important investment in their life (to date), everyone has a responsibility to their family to get the best deal possible. That doesn't mean you cut the first lender loose to move to another to save just an 1/8 in rate. There are other issues that come into consideration. Reputation means everything here.......especially if the company with the new, lower quote has a reputation of dropping the ball in the 11th hour. That move will actually wind up costing someone more. However, I think the OP owes it to the first lender to see if they can improve upon their locked rate before bailing. Where you mail your check to should be the last thing on the list, because servicing (the company that collects and posts the payments) can change at the drop of a hat. We are a portfolio lender, we hold our own paper on our mortgages, but payments are collected two time-zones away.

The OP hasn't come back to post, so I suspect they've ditched their first lender, who I suspect was the one that aided in the OP's winning their bid and probably even assisted after hours, when their credit union wasn't available. If that's the case, shame on you if you didn't allow the first lender to match the quote -
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Old 05-29-2011, 11:02 PM
 
7 posts, read 90,184 times
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I'm the OP. We didn't switch lenders, talked to our original lender candidly and ended up sticking with them. No need for a "shame on you" comment, thank you.
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Old 05-30-2011, 09:30 AM
 
Location: MID ATLANTIC
8,140 posts, read 19,989,830 times
Reputation: 9382
Quote:
Originally Posted by Daphne7 View Post
I'm the OP. We didn't switch lenders, talked to our original lender candidly and ended up sticking with them. No need for a "shame on you" comment, thank you.
Don't take yourself so seriously. The mortgage forum gets more drive-by posters than any other forum here. People get the information they want and move on, never to be heard from again. Most choose to reply with a conclusion before they move on. More than 10 days had passed - it was not unreasonable to think you had done the same.

My comment was intended for anyone reading, quite possibly a year or two from now, thinking there were no consequences for fickle decisions. And for those to think through knowing there is a difference between a fickle decision and a difficult decision for their family's financial health.
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Old 04-23-2013, 07:57 PM
 
6 posts, read 111,743 times
Reputation: 11
I found myself in some different situation. To make it short, here it is:

I found a house and made an offer, got accepted, got the inspection and appraisal. When the appraisal came back, the house was appraised 10K less than the price that I offered but we like the location so we're willing to pay the difference.

Since then, we found quite a few different lenders that are willing to offer lower rates as well as some other fees. When I tried to talk to the current lender, asking him repeatedly that if he was willing to match the rate, he was trying to beat around the bush and said that we have signed a contract with them and locked in the interest rate. Secondly, when I asked them about lender credit, he said that his company wasn't required to put in the lender credit, even though on the cover letter, it stated the lender credit.

I think he might think that I'm stupid because I'm willing to pay for a house 10K more than the appraised value. I'm not. The location would make up for that in the long run.

BTW, my loan is FHA 30 year fixed.
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Old 04-23-2013, 07:58 PM
 
6 posts, read 111,743 times
Reputation: 11
correction: about the lender credit, it was put in the cover page but not in the GFE, section A: Adjusted Origination Charges.
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