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can you continue shopping for mortgage once you've locked rate with one lender

Home Mortgages and Home Buying can you continue shopping for mortgage once you've locked rate with one lender

  • Avatar soundsystem 
    Participant
    Status: Physician
    Posts: 58
    Joined: 12/14/2017
    Earnest refinancing bonus

    Rates are pretty good today, but have read they may go down further after the Fed meeting this month. So let’s say I lock a rate today with a Bank (I just signed purchase contract), if rates go down or I find a better rate let’s say in a week from now, can I just switch lender?

    #231895 Reply
    Avatar DCdoc 
    Participant
    Status: Physician
    Posts: 554
    Joined: 06/14/2016

    What does the contract you signed say?

    #231903 Reply
    ENT Doc ENT Doc 
    Participant
    Status: Physician
    Posts: 3502
    Joined: 01/14/2017

    Yeah, did you sign anything? I’d keep looking and playing them against each other.

    #231952 Reply
    White.Beard.Doc White.Beard.Doc 
    Participant
    Status: Physician
    Posts: 936
    Joined: 02/06/2016

    If you change lenders, you will lose the application fee.  But you are under no obligation to close on that rate locked loan, at least in my state.  And even after I close on a refinance mortgage loan in my state, I have a recision period of 3 days after signing all the documents to change my mind.

    So go ahead and keep shopping if you wish, but the reality is it might be tricky to be ready to close in time with a different lender, depending on the processing time for gathering documents, answering all the lenders requests for further documents, and then going through their underwriting process for approval.

    At the same time, it might save you some real money to use the threat of not closing on that first loan to play multiple lenders off one against another.  You could try to get them into a bidding war.  I have never heard of that being done, but who knows.  At the same time, when they do all of the work to document and underwrite the loan, they have a lot of time and energy invested, but they won’t get their big payoff until they actually complete the loan.

    #231979 Reply

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