Posted on: 23rd Feb, 2011 02:01 pm
I locked with a broker some days ago, but a serendipitous call from another broker I’d had a couple of conversations with called today offering a rate .375 better than my locked rate. That’s significant enough for us to raise the issue with the broker with whom we’d locked. He told me that if I walked on his deal his company would take a hit of 2% of the loan value from (I assume) the lender. The second broker and a loan officer with my bank told me this is likely not true. Can someone please shed light on this? I wouldn’t walk on my original broker easily (I feel I owe him), but as previously stated, the difference in our monthly bears consideration.
Thanks.
Larry
Thanks.
Larry
Unless they have some sort of unusual arrangement with the bank that is likely untrue. However it is not untrue that breaking a locked rate costs the lender money and makes for bad relations between the broker and the lender. It is an awkward place for the original lender since rates change and you are not comparing rates from the same day. See if they can match or at least come close to the rate you were offered but before you do make sure the lender offering is not offering more than they can deliver just to get you to swing towards them - if they are using the bait and switch you could end up finding out too late that the offer is not real and the rate is in fact higher. There are a lot of people out there that will tell you what you want to hear to get you to sign on the line - and then the truth is found out too late.
What were the offers you were given and what date did you receive them?
What were the offers you were given and what date did you receive them?
I locked at 5.25 a few days ago (it cost me around $500 to buy it down from 5.375) and today was offered 4.875.
is this for conventional of fha? 5.25% and having to buy it down is very high for FHA but conventional it may not have been too out of line
also what is the loan amount?
It was conventional, and the amount is $204,000.
conventional is trickier but obviously there is a big diff between the two and you should find out why
Is one missing something? Lots of variables... loan to value - credit scores etc... make sure they are working with the same terms
but also remember you agreed to the terms for them to lock - if rates had gone up you wouldn't be happy if the bank told you too bad......
Is one missing something? Lots of variables... loan to value - credit scores etc... make sure they are working with the same terms
but also remember you agreed to the terms for them to lock - if rates had gone up you wouldn't be happy if the bank told you too bad......
Thanks for your help Brian. I've made every attempt to make sure the second broker has exactly the same information as the first. I also realize the investment the first broker has made with me, and I wouldn't leave him without regret and some form of compensation. We'll probably stick with him but just aren't sure at the moment.
Thanks again.
Larry
Thanks again.
Larry
You are welcome - I have been on both sides of this and some times there is nothing you can do once you have locked - you sound like you want to be fair and want to watch out for yourself - explain the situation and see if they can cut you a better deal. The 2 point hit by the bank was likely a knee jerk reaction out of fear and it may be the amount that he was going to make off of the loan and now he loses it??? who knows but if he can compete stick with him - if he doesnt then cut your ties and get your loan done
Good Luck let us know how it turns out
B
Good Luck let us know how it turns out
B