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I have already signed a contract to buy a townhouse. The seller is giving me rebate if I go with their mortgage lender. At the time of contract they showed me reasonable rates but today when I spoke to their loan counceler they are offering me much higher rate than market. Is there anyway I can terminate the contract and still get back my escrow money?
If you don't qualify for a loan with higher rates and you have applied within the window allowed in your contract, then you get your escrow back. If you just don't want to pay more, then no way will you get your money back (unless they feel like it but in this market? Not much of a chance!).
Also keep in mind that it is not just your escrow money at risk. If you back out, they can sue you and force you to close on the property.
Or I guess you could be a total jerk and back out at inspection. Demand everything be done and if they say no to something, you could back out. But that would be pretty low. You willingly entered into a contract and these people have probably made new plans (buying a new home or whatever) because they and you are under a legally binding contract. Good faith in executing the contract would be expected.
I have already signed a contract to buy a townhouse. The seller is giving me rebate if I go with their mortgage lender. At the time of contract they showed me reasonable rates but today when I spoke to their loan counceler they are offering me much higher rate than market. Is there anyway I can terminate the contract and still get back my escrow money?
Thanks.
You can forego the rebate and go with any lender you choose if the rates are that bad.
Where are you getting your market number from? If they are quoting you 6.5% over the phone or if the rate is posted in the newspaper, it may not be entirely accurate.
Where are you getting your market number from? If they are quoting you 6.5% over the phone or if the rate is posted in the newspaper, it may not be entirely accurate.
I got good faith estimates from Wachovia and Bank of America.
We had a similar situation when we purchased with Pulte. I got several GFEs and then we decided to purchase from Pulte. Their rates were higher and the other GFEs had no origination or discount points where Pulte was charging at least 1 point (it was over 2 years ago so the details are getting fuzzy). I got the Pulte internal sales person involved and somehow got Pulte Mortgage to match the rate and cut the points down to 0.5.
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