At what point can I back-out of a refi for a better rate?

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kxl19
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Joined: Wed Mar 13, 2013 12:41 am

At what point can I back-out of a refi for a better rate?

Post by kxl19 »

We're in the process of a re-fi, I've recently signed a rate-lock, but we're awaiting underwriting because my wife went on maternity leave and her income has changed, and mortgage agent was concerned this would cause the underwriter to not process the loan.

Simultaneously, our original mortgage broker (different from the one above) has come back to us with the UWM offer (3% / 30 year, minimal closing costs), and said it won't be an issue to qualify on my income alone.

When am I contractually obligated to the first lender? Can I backout if underwriting doesn't go through the first?
Monsterflockster
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Re: At what point can I back-out of a refi for a better rate?

Post by Monsterflockster »

They’re concerned about you having a baby? That would be enough for me to talk to a supervisor and have them close my refinance with them right there.
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mrspock
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Re: At what point can I back-out of a refi for a better rate?

Post by mrspock »

kxl19 wrote: Mon May 25, 2020 2:58 pm We're in the process of a re-fi, I've recently signed a rate-lock, but we're awaiting underwriting because my wife went on maternity leave and her income has changed, and mortgage agent was concerned this would cause the underwriter to not process the loan.

Simultaneously, our original mortgage broker (different from the one above) has come back to us with the UWM offer (3% / 30 year, minimal closing costs), and said it won't be an issue to qualify on my income alone.

When am I contractually obligated to the first lender? Can I backout if underwriting doesn't go through the first?
I'm no lawyer, but pretty sure you can pull the application right up until you signed the final loan docs which you need to sign. And even THEN.... mortgages in the US are "callable" meaning you can hand back the money the next day if you want, though by then you'd be out any closing costs. Keep in mind, the deeper you go in the process there will be a point you are spending non-refundable money on things like appraisals, so make sure you decide on which lender you are going with before the appraisal happens.

Think about it, you might find some clause in the loan docs on the eve of the loan signing which you don't agree with, you could decide to nix the entire thing right there -- granted you'd be about the appraisal fee by then (and might have a disappointed loans officer), but you are perfectly within your rights to refuse to sign a document you don't agree with.

For reference, I recently deep six'd a mortgage application with Citi right before the appraisal (but after submitting tons of income/asset verification docs), their rate was beaten by a competitor, they didn't want to match and that was that. I was out I think a $30 credit check fee. What I did was pen an e-mail explaining the other offer, I offered to still go with them if they could match (giving them the option to still keep the business), otherwise I asked them to withdraw my application.
cherijoh
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Re: At what point can I back-out of a refi for a better rate?

Post by cherijoh »

kxl19 wrote: Mon May 25, 2020 2:58 pm We're in the process of a re-fi, I've recently signed a rate-lock, but we're awaiting underwriting because my wife went on maternity leave and her income has changed, and mortgage agent was concerned this would cause the underwriter to not process the loan.

Simultaneously, our original mortgage broker (different from the one above) has come back to us with the UWM offer (3% / 30 year, minimal closing costs), and said it won't be an issue to qualify on my income alone.

When am I contractually obligated to the first lender? Can I backout if underwriting doesn't go through the first?
I'm a little confused. How did you find the refi? On your own or through the mortgage broker who brought you the new offer? Or is it the same lender who holds your current mortgage.

What expenses have you already paid up front (e.g., appraisal, credit pull)?
Topic Author
kxl19
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Joined: Wed Mar 13, 2013 12:41 am

Re: At what point can I back-out of a refi for a better rate?

Post by kxl19 »

cherijoh wrote: Mon May 25, 2020 3:16 pm I'm a little confused. How did you find the refi? On your own or through the mortgage broker who brought you the new offer? Or is it the same lender who holds your current mortgage.

What expenses have you already paid up front (e.g., appraisal, credit pull)?
Found the first refi thru Costco on my own (different lender). At the time, my mortgage broker (who found our orig mortgage) didn't have any offers. Then, yesterday, he calls saying there's great deals for UWM.

So far upfront paid appraisal + credit check.
frankandbeans
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Re: At what point can I back-out of a refi for a better rate?

Post by frankandbeans »

You have a legal right to rescind until three days after closing. You’ll likely lose any fees you’ve been asked to up-front.
Ewb
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Re: At what point can I back-out of a refi for a better rate?

Post by Ewb »

I’ve backed out of two refinances after signing documents and wiring money within 72 hours of signing. The documents you sign to back out are part of your final packet. Neither one of my home refinances required a home appraisal. The first one I paid the mobile notary fee (local mortgage broker), the second one I owed nothing (better.com).
cherijoh
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Re: At what point can I back-out of a refi for a better rate?

Post by cherijoh »

Ewb wrote: Mon May 25, 2020 3:47 pm I’ve backed out of two refinances after signing documents and wiring money within 72 hours of signing. The documents you sign to back out are part of your final packet. Neither one of my home refinances required a home appraisal. The first one I paid the mobile notary fee (local mortgage broker), the second one I owed nothing (better.com).
Why did you back out of the deals after closing? I Knew it was possible, but I've never heard of anyone actally doing it once much less twice.
Ewb
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Re: At what point can I back-out of a refi for a better rate?

Post by Ewb »

Better.com had a better rate and a $2500 separate credit with AMEX compared to local broker. 2nd time was a dream house came on market right at closing.
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