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Do I change the lender because of higher interest rate?

I am in process of getting a loan in the amount of $130,000 at 4% interest rate, 30yr and 20% down from a lender. Closing in 2 weeks. The loan application has been charged and appraisal is due next week. BofA approached me with a 3.625% rate for the same and $300 less on the closing. Is it a good idea to switch the lenders at this time. Please advise by heleneR77304 from Kingston, Ohio. Oct 9th 2015 Reply


Tim Bradford (Tim Bradford)
#5 ranked lender in Ohio - 145 contributions

I would suggest that you talk with your current lender before you do anything. It would most likely delay the closing of your loan. You would need to make sure the seller would have no problem with that occurring. Also, looking at BoFA today they are quoting a 3.875% No points rate. That said, recently rates have dropped a little bit. I suspect there is something else to explain the difference in the loan they are presenting. Just my opinion. https://www.bankofamerica.com/home-loans/home-loan-rates.go

Oct 9th 2015
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,619 contributions

Typically, I suggest you do all your shopping before you commit to a lender, and not after.. based on your question, your lender has already submitted a full packet to underwriting and ordered the appraisal.. Hours have already been spent working on your file, so it's unethical to put your loan officer through all this work only to pull out at the last minute because of an insignificant difference. Also, because rates change daily, it's very possible your current lender can do the same thing and you wont have to move your loan.. plus you run the risk of the new lender not accepting the appraisal transfer.. which would result in an additional cost, not a savings.. also, with BofA.. they most always NEVER close a loan on time.. if you're purchasing a home, and you have a close of escrow date.. even though BofA might be slightly better, it could result in you losing your home if you cannot close on time.. I would suggest you talk to your existing lender and see what they can do.. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

Oct 9th 2015
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Joe Metzler (JoeMetzler)
#19 ranked lender in Minnesota - 3,876 contributions

Switching in the middle of the process is generally NOT a good idea for a multitude of reasons, especially if closing in just two weeks. The problem with interest rates is that they are a forever moving target. They can, and often do change daily, and sometimes multiple times during the day. Rates have dipped a bit lately, and it isn't that the first guy was worse, and the other one is better. It is simply that rates changed. Calling back on Monday, and the "new" offer might be long gone. I suggest staying where you are, and be happy. The rate difference on a $130,000 loan is minor.

Oct 10th 2015
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Larry Gray (lgray_312_247)
#594 ranked lender in California - 1,139 contributions

It was interesting for many of us to see the #1 ranked lender for lender411.com in Ohio being a mortgage rep from B of A! You can bet he knows the best case scenario conforming 30 yr fixed rate (3.875%) for the most recent day, Friday. Most of us are pretty close in rates and pricing. If you are only 2 weeks from closing I also suggest you discuss your concerns with your current lender about how you feel you should get a better interest rate. However, changing midstream on a purchase loan...particularly two weeks from closing and with any new lender being subject to the recent regulatory changes referred to as TRID...is not advisable. Shopping for rate should be over with in the earliest days of your purchase.

Oct 11th 2015
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Shawn Custis (scustis@fuse.net)
#94 ranked lender in Ohio - 6 contributions

Most likely the rate was quoted to get you to proceed. Once you do, then you would be passed along to someone else that would tell you the rate is higher because of the day and time it was quoted. You would most likely end up with the same rate. Stay where you are as you probably feel comfortable with them so far and looking to save $300 could result in thousand$ of headaches!

Oct 12th 2015
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Sara Deere (Saraloveshomeloans)
#39 ranked lender in Kansas - 534 contributions

I would first check with your lender to see what your mortgage loan originator, because rates have dropped slightly. Other information submitted to this question is correct additional headaches and your out of pocket costs would increase, if you were to make a switch at this late in the process.

Oct 12th 2015
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