change lender?

greg · Joined: 24 Mar 2005 Posts: 2

Hello all. This forum seems to be a good place for my question.

I got a into a new construction. our lender should give us a commitment letter soon, per builder's request. We'll be also paying an application fee to the lender. But the closing date is about 5 months away and our rate is floating for now as they wanted about 6.5% to lock now 5 month ahead.

My question: are we in a position to still change the lender? Say, 60 days before the closing, we find a lender with a much better deal and our existing application rate is not locked yet. Can we still change the lenders?

we'd probably loose the applications fee, but that's OK

Thanks.

Shotgunrider · Joined: 22 Mar 2005 Posts: 4 Location: Roanoke, VA

I see no reason why you couldn't exercise your right to get the best deal, however I would show some class and let the original procurring LO match or beat the rate.

greg · Joined: 24 Mar 2005 Posts: 2

Shotgunrider wrote: I see no reason why you couldn't exercise your right to get the best deal, however I would show some class and let the original procurring LO match or beat the rate.

Good idea. Thanks. It is worth a try since money and time have been spent.

Also, what do people think about the rates? do I sound reasonable saying that rates will bounce in 6.0-6.5% abouts anyway? Why lock now for 6.5? I still hope to get at least that in July or even better.

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

I don't know about what different lenders would offer, but the fed just raised interest rates, and even announced plans to continue to raise rates in the coming months, citing inflationary pressures that extend beyond the recent increases in oil prices. I think it is likely you can plan on paying a higher interest rate in 5 months. Note: I am not even a lender, but I do keep a close watch on the markets.

What may change is your market could start to favor the buyer. As interest rates increase, fewer people may be able to buy houses, and sellers may be forced to lower the prices of houses. This is the bubble that some people are starting to talk about.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

You need to know what is available in your market. For example we have the option to lock as much as 360 days out, or even 120 days w/o a property. The fees on this are there, but there is an option to have a 'float down' within 60 days of the close, which allows you to change and get that better rate.

This may be something you should check into. Also how much is the application fee that you've paid?

Does it make sense to lock now? Perhaps, you're gambling with 3-4 months worth of rate changes and hoping they stay the same or get better.

chow · Posted: Thu Mar 24, 2005 8:36 pm Post subject:

Hello, did anyone say LOCK a rate? Or option to lock? Haplo is running in the right direction!

Know your construction lender well right now-know them very well. 8)

Tony Hedrick

Shotgunrider wrote: I see no reason why you couldn't exercise your right to get the best deal, however I would show some class and let the original procurring LO match or beat the rate.