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My sister-in-law and her husband pre-qualified for a mortgage in December through their credit union. They just this past week had an offer accepted on a house they want to buy. They have just discovered that even though they had prequalified, the interest rate has gone up a full percentage point.
Are they able to shop around or are they "locked in" since their offer was accepted? Thanks.
They should not be locked in as they were only "pre-approved". There was nothing to lock in as they had no valid contract to purchase a specific property. The pre-approval is a very basic preliminary process -an initial look see if they qualify. There will be a much more in-depth process involving underwriting when they are actually ready to go to the closing table.
They never locked in a rate right since they did nit have anything under contract?
I'm assuming you are correct. I think they are just going to shop around. They were looking at a 30 year fixed mortgage. Originally they pre-qualified at 4.25, and now rate is 5.25% (which to be honest, looks like it's in line with current rates in our area).
5.25% is kinda high. I wouldn't lock it in (im in the process of buying too). It doesn't look like it'll go up with the way the market is going but I like to gamble. I got a pre-approval just the other day at 4.75 and even that isn't the best rate.
For an identically qualified borrower artes are not up 1% since December. Tell them to get a refferral from someone trust for a Loan officer. LO's are who make or break the experience so concentrate on that and not what name is hanging outside the building.
As for the rates being up 1%, it's entirely possible. Fannie Mae increased their "Pricing Adjustments" for all loans delivered after March 1 to investors, so that means we saw the increases go up in late January/early February. So, we had a natural market movement, coupled with a Fannie adjustment.
When someone is prequalifies, most lenders prepare them that rates change and that until a property is located, not much can be guaranteed. But when it's your wallet that's being hit, all conversations about could be's go out the window. Let's face it, it's human nature to want the best rate. It can't always happen - as all of my fence sitters will tell you.
Fiance died...property went through probate...lawyer didn't put me on the mortgage loan...i'm on the grant deed as joint tenancy ...bank won't let me assume loan must refinance & pay around 35000. House is worth 125000. Loan debt is 144250. Realtor says short sale is better than foreclosure ..stop making pym'ts..".i'm gunshy."..he says it can't hurt my credit because it's not my loan...what am I responsible for in cost ...can they[the bank]come after my apts? Should I continue staying in home /quit paying mortgage..do keep paying taxes/ins./HOA fees...or can I KEEP LIVING IN HOME ..pay everything...& wait for home to increase in value ...I need some sound advice ..Banning ca 92220
skRobinson, wow. What a mess for you! I'm so sorry.
You haven't made it clear what you want to do. Do you WANT to stay in the home? If so, you can probably keep making payments, taxes, HOA and insurance and wait for the home to increase in value. No reason for the bank to foreclose if someone is making payments. They can't come after your 'apts'. I'm assuming apts means apartments.
Your Realtor is right about a short sale not affecting your credit. It won't affect your credit if they foreclose either. I don't see the benefit of a short sale over a foreclosure and a short sale is a LOT more hassle for you.
If the property went through probate I'm not sure how you can still be on the deed as "Joint Tenancy". Don't you mean the home is entirely in your name now?
You REALLY need to talk to a Real Estate Attorney. Your post is a bit difficult to understand so I am just guessing at what your questions really are.
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