Locked with 2 lenders for a Refi. Should I cancel with one of them?

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Ron Ronnerson
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Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by Ron Ronnerson » Fri May 22, 2020 9:31 pm

I’m looking to refinance my mortgage and found a lender who is offering me terms that I'm happy with so I locked the rate with them a couple of days ago (I’ll call them lender 1). Then, another lender (lender 2) offered a better deal so I locked with them today. I don't want to waste anyone's time, though. Should I withdraw my application with one of them or just proceed forward with both in case some issue pops up somewhere along the process with one of the potential lenders and the loan doesn't work out or the rate lock expires? I don't anticipate these issues but does having two potential lenders serve as a sort of insurance or is it just bad form to do this?

By the way, lender 2 happens to be Better.com and, for those familiar with their current offer, they provide a $2500 credit to American Express card holders. However, since that credit doesn't show up on the loan estimate, I can't use it to bargain with lender 1.

Lender 1 has been easy and straightforward to deal with. In contrast, there have been some bumps along the road already with lender 2. They had initially provided me with an offer that was nowhere near competitive to lender 1 and lender 3 (I decided not to move forward with lender 3).

Once I got loan estimates from the others (thanks to psmoove from the Refi Mega Thread on the negotiation tips), lender 2 beat the best offer by providing a $650 larger credit and were offering the AmEx credit as well. They had done a soft pull already and saw that my credit score was 805. Today, after doing a hard pull, they reduced the lender credit they’re offering by $520 because they said my middle credit score is 795 and that results in a smaller credit than someone with a credit score above 800.

The person I spoke with at lender 2 first said that the appraisal would likely be waived since other lenders weren’t requiring it (neither lender 1 nor lender 3 said it was needed since my loan-to-value is about 40%). I also asked for a confirmation that I was signed up for the American Express offer and was told that it was applied since there is no line that appears for an appraisal charge on the loan estimate and the AmEx offer waives that fee. However, I haven’t entered my American Express credit card number anywhere so don’t really have hard confirmation that the promo has been applied. I had also asked lender 2 how long the lock is for and was told that it is usually for 60 days but it is for 45 days for those who have the AmEx offer applied. My rate lock shows 60 days. So, I’m not feeling as comfortable with lender 2 but they still appear to be offering the best deal, assuming that there are not more unexpected surprises ahead.

I’m not sure what to do so was thinking that maybe it would be okay to keep both lenders for the time being. Lender 2 is not charging me for the appraisal due to the AmEx promo. However, if they cover the appraisal and then I don’t end up closing with them, would I need to pay for it myself after the fact?

Sorry for the amateurish questions but I haven't been in this sort of a situation before. Any guidance on how to proceed would be much appreciated.

annu
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by annu » Fri May 22, 2020 11:52 pm

Hey,

Looks like Owning is only CA, anything for other states? I am trying to help a family member and same boat. Have him locked for

15 year fixed @ 2.625% for LTV of 37% and 1600 in closing cost.
(Doing a cash out refinance, so can pay off a rental which is @ 4.125%).

Based on your analysis so far, since owning is out, only better.com left, makes sense to look into it? The quick check on their website(where you just enter basic info), is showing rates much higger in 3%+ range

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BrandonBogle
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by BrandonBogle » Sat May 23, 2020 12:22 am

If you locked but didn't do a "intent to proceed" with lender 1, I wouldn't do anything. Keep them there in your back pocket until Better gets closer to closing. I was in the same situation as you and didn't withdraw my app and instead, held it and let my Loan Estimate expire, which was the Friday before my Wednesday closing.

Better took 18 days from locking to closing and it was a smooth process. I was nervous about the Amex credit too, but the step to key in the information isn't until after you accept the initial closing disclosure, so don't worry that it hasn't been done yet. Also, you can see Better's estimated close date by reviewing your Loan Estimate and see how many prepaid days of interest is in Section F. That is the number of days until end-of-month, so work backwards to your estimated closing date.

Also, if you haven't locked already, take screenshots of your rate tables, both with and without escrow, 15-year, 30-year, and other loan programs. When you lock, you lock the entire rate table and can switch up until closing (though if you switch after your initial closing disclosure, you end up resetting the 3-day wait period before you can close as they draw up a new closing disclosure). However, you cannot see the table on their website anymore. I locked 2.875% for 15 year and didn't take screenshots. My "Concierge" emailed me the screenshots and I decided to switch to the 2.625% 15 year option. The 30 year options were too high for me to take.

My understanding is that if you do not close, you still don't pay for the appraisal even if it was completed. But I'm unsure. My property was eligible for a waiver.

Topic Author
Ron Ronnerson
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by Ron Ronnerson » Sat May 23, 2020 1:36 am

annu wrote:
Fri May 22, 2020 11:52 pm
Hey,

Looks like Owning is only CA, anything for other states? I am trying to help a family member and same boat. Have him locked for

15 year fixed @ 2.625% for LTV of 37% and 1600 in closing cost.
(Doing a cash out refinance, so can pay off a rental which is @ 4.125%).

Based on your analysis so far, since owning is out, only better.com left, makes sense to look into it? The quick check on their website(where you just enter basic info), is showing rates much higger in 3%+ range
I'm not familiar with the lenders available in other states (I'm barely familiar with those in California, for that matter) so can't help you on that front, unfortunately. I started with Owning by calling them rather than doing an online application and they gave me a good quote verbally. I was seriously thinking I'd move forward with them. However, then I ended up on the Refi Mega Thread and some people were mentioning the success they'd had bargaining with the lenders. For Better, I filled out an application. The rates I received were not really competitive. However, I was able to use the quote from Owning to bargain with other lenders by phone and those other lenders improved on the offer. I haven't had the very smoothest ride yet with Better but it's early in the process. The rates and cost they're offering me are pretty much the same among the lenders at this point but Better also adds that American Express credit on top which makes their offer particularly appealing.

Topic Author
Ron Ronnerson
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by Ron Ronnerson » Sat May 23, 2020 1:58 am

BrandonBogle wrote:
Sat May 23, 2020 12:22 am
If you locked but didn't do a "intent to proceed" with lender 1, I wouldn't do anything. Keep them there in your back pocket until Better gets closer to closing. I was in the same situation as you and didn't withdraw my app and instead, held it and let my Loan Estimate expire, which was the Friday before my Wednesday closing.

Better took 18 days from locking to closing and it was a smooth process. I was nervous about the Amex credit too, but the step to key in the information isn't until after you accept the initial closing disclosure, so don't worry that it hasn't been done yet. Also, you can see Better's estimated close date by reviewing your Loan Estimate and see how many prepaid days of interest is in Section F. That is the number of days until end-of-month, so work backwards to your estimated closing date.

Also, if you haven't locked already, take screenshots of your rate tables, both with and without escrow, 15-year, 30-year, and other loan programs. When you lock, you lock the entire rate table and can switch up until closing (though if you switch after your initial closing disclosure, you end up resetting the 3-day wait period before you can close as they draw up a new closing disclosure). However, you cannot see the table on their website anymore. I locked 2.875% for 15 year and didn't take screenshots. My "Concierge" emailed me the screenshots and I decided to switch to the 2.625% 15 year option. The 30 year options were too high for me to take.

My understanding is that if you do not close, you still don't pay for the appraisal even if it was completed. But I'm unsure. My property was eligible for a waiver.
Thank you so much for such a helpful response. I've already signed the intent to proceed with lender 1. Is that an issue? I really did intend to proceed with them for what that's worth!

It sounds like you had a very smooth experience with Better and that's good to know. 18 days is definitely a quick turnaround time. I also appreciate the details on how the AmEx offer worked.

I've already locked with Better so can't see the other rates anymore but will request the table from my (so-called) concierge in case I decide to make a change.

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BrandonBogle
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by BrandonBogle » Sat May 23, 2020 2:08 am

Already submitting an intent to proceed is not a problem in and of itself, but usually that authorizes the lender to proceed with other things such as ordering an appraisal or title review. As these are 3rd party costs that may result in fees due, you may want to reach out to Owning and have them hold further processing of your loan at this time. If you were to close with Owning, they pay all those costs, but I don’t know what their policy is if they order/get charged them, but you don’t close.

That’s the business side of it. Then there is your personal ethics. Without saying which side you, I, or anyone should fall on, just keep in mind that, like a realtor, most loan officers make their real money on commission (Better is an exception to this). Thus, they, the processing team, underwriters, etc. are doing work that won’t get paid for. However, that is also a cost of business and they know that some loans just won’t close.

Meanwhile, if you haven’t sent in your docs like income and bank accounts, the Owning loan hasn’t gone too far yet.

Btw, hopefully the rough experience you have had with Better so far has only been because of having to get them to compete with Owning. If so, I’ll just warn you that part of the process with Better (from my sample size of 1), is that you have to be on the ball to follow up on things. There were a few times where I had a task item that needed attention and wasn’t addressed in 1-2 days, but after a follow up phone call or email, 30 minutes later it was addressed. This isn’t hard, but it can be unnerving for some folks.

And while I’ve found the closing expert to be the best at communication (I’ve talked on the phone with that person three times and all emails are answered within minutes to an hour or so), the processing expert wasn’t too bad. My concierge I never seemed to be able to get ahold of after I locked my rate. A Junior concierge worked alongside mine and that person is the one that I would reach out to in order to get any traction. Then my loan officer would send a reply.

Also, I appreciated that I got a PDF of my closing package for me to review the day before closing and three or so days after closing I got a PDF of my executed/signed docs. All 145 pages of it! :? I appreciate them providing that easily enough for me to review and keep.

seawolf21
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Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by seawolf21 » Sat May 23, 2020 5:12 am

Better decide soon. Eventually you are misleading one lender on intention to proceed knowing it is false. Underwriter is going to find out about the other lender credit check during underwriting in which you have to explain outcome of that credit check (no or new debt). In some states, a notice of settlement is to be filed with the county clerk so that other lenders know a mortgage closing should be taking place soon. The purpose of this is to prevent mortgage fraud involving applicant taking out multiple mortgages on same property.

Topic Author
Ron Ronnerson
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Joined: Sat Oct 26, 2013 6:53 pm
Location: Bay Area

Re: Locked with 2 lenders for a Refi. Should I cancel with one of them?

Post by Ron Ronnerson » Sat May 23, 2020 10:30 am

Thanks for the responses. I'll proceed forward with the lender to whom I've begun submitting documentation and tell the other one to hold off. I'm not trying to mislead anyone and care about a smooth process more than anything else since the rate and cost are the same with the different lenders.

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