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We are in process on a conventional mortgage loan, 30 year fixed at 4.375%. We actually still have about 40-45 days to close on it because of a drawn out contract on our sale and on the home we are buying. I've been able to find another bank offering 4.0% which I can get with our initial bank for 6k in points. 6k is a lot of money. What should we do? Talk to the first bank? Cancel that loan and apply for a new one? We have really high credit scores, a 25% downpayment, and great income. Please advise! TIA and I will definitely come back to reply to feedback.
Most banks have a renegotiation policy. Talk to them, ask their policy and be sure you won't be coming back again, it's usually a 1x opportunity. This upcoming week, Tuesday thru Friday brings data to create a volatile ride.
The problem that comes with lower rates is increased loan activity. Know who you are going to be moving your loan to. One top ten bank has spectacular rates, but they can't get anyone closed in under 45 days....30 is the soonest they can promise closing. USAA is telling vets 60 to 90 days! Top 3 big box is rolling the dice. I just left a small regional PA bank (to another PA Bank) because they were so bogged down in compliance and had someone new every day review the loan and the conditions flowed nonstop.
Yes, rates are better.....but if they are the absolutely the best, there may be a reason why.
According to our bank website they are unable to renegotiate the rate after locked. I'll still ask though. Are "big boxes" the most well known banks? We're not considering going with one of those. I should have also added that our rate lock expires 6/8 and we won't have closed by then. Also our sales contract on the house stated that we needed our bank commitment by 5/3 but that was for a 5/30 closing so I don't know now if we are obligated to stay with the bank we have because of that even though we probably won't close on the house until 6/30 or maybe even later.
I've had a good experience so far with our lender but seriously we still have a good 45 days til we close and 6k in points is a whole lot of money. I'll discuss with them that I might go elsewhere. Can't wait to be done with this.
If one bank is now offering 4% with 0 points and the one we are with now is offering 4% if we pay for 2 points that's a 6k difference. Fairly significant no? We've only paid about $367 so far and that was for the appraisal on the first loan.
You don't have any obligation to cancel the first loan application just because you applied elsewhere. Talk to the first, but apply at the 2nd. You will have 2 appraisal fees (so what, better than 2 points). By not canceling the first application open, you are not in violation of your contract.
Too many variables not to play it safe and keep the first open - what if lender #2's appraisal is low, but the 1st one is not?
Big box = top 10. If you don't mind saying, who is this lender that's holding feet to the fire? Very few are doing this.
Thanks that is great advice SmartMoney! I haven't even spoken to our lender yet, so I suppose I am jumping the gun? I just assumed that they wouldn't negotiate. We're working with a local credit union.
Our credit union won't budge. I spoke with BNC and they can give us 4.125% with 3k at closing which covers their 1k in fees and then we just pay for a second appraisal. Sound okay?
Sounds like your loan amount is around $300,000 (2 points = $6,000 as you mentioned).
You should look at the difference in monthly payments and figure out how long it would take you to recoup any investments
you've already made with the credit union. Most importantly, try to figure out how long you will be living at the property to see whether or not it is going to make a big difference.
Pick the best, most reliable service vs such a small difference in interest rates.
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