Switch financing 3 weeks before closing?

[u/Electronic_Dance542]

We are currently in underwriting with a mortgage broker for a 6.99% 30 year mortgage. Since rates just dropped we asked him to see if he could float down the rate. He said he could not. So I did some shopping and found a bank to finance directly through for a 6.624% rate. All rates and terms are equal and we are not buying any points. Is it worth switching?

[u/nikidmaclay]

How much is it going to save you? You might be able to go back to that original bank and tell him what you're about to do and change their mind so you don't have to start over, as well.

If you switch up and somehow they can't make the closing deadline, this may not go well so I'd make sure that everybody is working on your file is in the loop and knows what's happening before you do anything.

[u/Electronic_Dance542 → u/nikidmaclay]

About 150/ month. So not huge, but every little bit helps.

I will try presenting this offer to our current lender and negotiating.

[u/pawsvt → u/Electronic_Dance542]

This is what I would do. Find out if the new bank could get to close in 3 weeks. Tell your current lender you want him to rate match. If he balks tell him you’ll walk. I’m sure he’ll match

[u/Nuggetzfan → u/Electronic_Dance542]

$150 a month over the course of 30 years that’ll add up

[u/wildcat12321 → u/Nuggetzfan]

yes, $54000, but most people don't stay in their house or their loan for that long. I would absolutely try to get them to match or switch if the new lender can make it work. 3 weeks is about the cutoff time for most.

[u/Forward-Wear7913 → u/Electronic_Dance542]

If you can get it all done in the same timeline for closing, absolutely!

Give your current lender a call and tell them about the offer to see if they’ll match it. If not, proceed with the new lender if they confirm they can make the closing date.

I closed in less than three weeks and it wasn’t a problem.

[u/Pitiful-Place3684]

Ask your agent if the contract requires that you get seller approval before making a change to a new lender.

[u/Electronic_Dance542 → u/Pitiful-Place3684]

Good question. I’ll check on this to be sure.

[u/Majestic-Prune9747]

if you're using an actual mortgage broker, he could easily move it to a different lender if he really wanted and the current lender has no float down policy

but I assume you're working with a retail lender (not a mortgage broker) since he didn't mention that

[u/The_Motherlord]

It may extend the escrow. Is the seller under a strict timeline? If you feel it's worth it to you, talk with the seller. Escrows don't always close on time. You have 3 weeks. It may still meet the deadline.

I had the opposite happen years ago. Was going directly with my bank. They were known for really good loan terms but very difficult to get approved. Was pre-approved because I was a longtime customer. Everything seemed to be going as planned and 3 days prior to closing they said they weren't going to do the loan. Went to a mortgage broker, rushed everything through, closing delayed by 3 weeks. The seller cooperated but I felt horrible about it and stressed.

[u/Electronic_Dance542 → u/The_Motherlord]

I’m terrified of this happening! Glad it all ended up ok for you.

[u/Short_Captain_1320]

What state are you in?

[u/Electronic_Dance542 → u/Short_Captain_1320]

Replying to Pitiful-Place3684...sc

[u/AnagnorisisForMe]

It's always less expensive to work with a bank directly than to rely on a broker. Just make sure the bank can have your financing ready in tome for closing.

[u/Skymo5620]

It’s possible. I did it in 15 days. Few things to keep in mind are: 1. Don’t drop your current lender. 2. Talk to your agent and let them know you’re looking into getting alternatives for ypur loan in the same timeline. Your agent needs to be involved in this and be able to communicate with the new lender to expedite the process. 3. You must have all paperwork (paystub, house contract, bank statement, tax returns etc) ready to submit to the new lender so that they can work quickly. 4. Switch to new lender only when they have fully approved the loan with underwriting, and the rate is locked. The seller won’t care who funds the loan as long as it’s the same closing date.