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Visitor
Phatty_McPatty
Posts: 1
Registered: ‎02-26-2009
0

Advice: When Is It Too Late to Change Lenders?

We have been using a friend of the family's real estate agent since we began our house search.  He gave us the # of a lender that he's friends with, and being new to this whole thing, we have solely been dealing with him without shopping around for rates.  Fast forward to now: our offer has been accepted, pending a home inspection, with his letter of approval.  Now that we're getting near to closing, we're realizing that our credit union probably has better rates than his small mortgage company (things have just come together faster than expected).  If the CU can give us a better rate, is it too late to change lenders?  I should mention that we've signed nothing and never even met this guy in person.  On the other hand, he's done all of the financing legwork, and been available during the weekends to work out a couple of Good Faith Estimates.  Is business just business?

Visitor
ski_meister1
Posts: 2
Registered: ‎02-27-2009
0

Re: Advice: When Is It Too Late to Change Lenders?

Phatty -

 

If you haven't signed anything, you can change lenders right up to close.  The risk though is that the longer you wait the more likely it is that you'll delay your closing.  In a hot market, you could risk losing the house and the earnest money you put down.  My guess is, that in this market you won't lose the house if you explain to the seller than you're switching mortgage companies.  You may also want to to talk to your current mortgage lender and see if he'll match your CU's rate.  In a hot market, he probably wouldn't consider it.  But these days everyone is hungry...

 

Good Luck!  Ski 

Visitor
MA-Broker
Posts: 2
Registered: ‎03-03-2009
0

Re: Advice: When Is It Too Late to Change Lenders?

The short answer here is YES "Business is Just Business" in this circumstance.  Changing your lender to your Credit Union makes perfect sense if you are given a better rate. Based on the facts that you have provided it would seem as though you are certainly early enough in the process to easily make this change; you haven't filed a complete mortgage application, paid no fees including property appraisal and haven't had the home inspected.  Review your contract to purchase with your Credit Union Representative to make sure they can meet your obligations (dates for performance) and then discuss the change with your RE agent.  Trust me, the agent will absolutely understand your decision to change despite whatever relationship exists between the agent and the mortgage lender he recommended.  Your agent is much more interested in closing the transaction and is working for you!  Good Luck!

If it makes you feel better send a thank you note to the Mortgage Originator who has done the "financing legwork" for you thus far and maybe a small gift certificate to a local restaurant.