Yes, You Can Switch LendersThe law protects you and your home with a three-day right, better known as the 3-Day Cooling-Off Rule, that lets you switch lenders before closing. This entitles you the right to cancel a mortgage refinance or home equity loan, and receive a full refund within three business days. You may want to switch mortgage companies or lenders before your loan closes, and here are four reasons why.
SEE ALSO: Mortgage Savvy: The Good Faith Estimate
#4 - You Deserve A Better DealSometimes rates drop, credit eases, or another firm is willing to cut you a better deal. Dont forget that mortgage rates and loans are products, and all products are negotiable. So be sure to shop around for the best offer. Some companies may even drop an entire percentage point off of interest to secure a sale.
#3 - Youre Fed Up With ServiceYou shouldnt stay with a lender just because of a good deal. The people you work with may be genuinely nice, and you may have a low interest rate, but pay close attention to how they handle your business. Disorganized offices often take two to three months to do something that should only take two or three weeks. Any delays in your loan will cost you in interest. There comes a time when you eventually lose confidence in your lender. At that point, look around the market and see if another lender is willing to match, or offer a better deal.
#2 Your Lender Changed The Rates, Conditions, Or Fees Of Your LoanThis is the second biggest reason why borrowers switch lenders. Be sure to read the fine print before signing on the dotted line. Brokers and lend officers will often quote you one rate, but then raise it at closing. If isnt stated in the contract, then your lender can change the rates, conditions, and fees. To avoid this, you have to have a rate lock agreement. Youll probably have to pay a fee to lock your rate, but thats better than having a large increase when you least expect it. You can also check with the Better Business Bureau or Ripoff Report to see if a lender has a bad history. Always do research on who youre borrowing from.
#1 Delays, Delays, DelaysThis is the number one reason why people switch lenders. Unethical lenders will claim that your paperwork was lost, or tell you that there were mistakes that need correcting. This then delays closing. And someone has to pay for the loan interest that accrues each day after the closing date. Apart from finding a trustworthy company, dont delay your own closing by:
- Being on time to meetings with appraisers.
- Making copies of all the paperwork.
- Submitting documents within 24 hours of receiving them.
SEE ALSO: Mortgages Rates And The Internet