What do I have to pay for is my bank is trying to raise my interest rate on a new mortgage????

Question

I've put down some money for earnest money. The bank told me I would get X interest rate. It's written in the contract that I must find financing that does not exceed X % interest, etc.

Now the bank is telling me I must pay Y %interest. It's more a lot more than X.

Do I still get my earnest money back?
Do I have to pay for the survey and apprasial that have already be completed???

My loan officer never mentioned anything about floating rates or locked rates! I'm so aggravated with this bank! I think I'm going to cut my loses, pay what I have to and back out of the contract. This is ridiculous!

Answer 1

As I answered previously, if you have a financing contingency in your contract and are not able to find financing which meets or is lower than the maximum specified, you certainly should be able to get your earnest money returned.

As far as the survey and appraisal, did you authorize them before you had a guaranteed acceptance of mortgage terms ? If you authorized them, you ARE liable to pay for them. If the lender took it upon him/herself to order these services without your authorization, you are not required to pay for them.

You will need to look over any documents which you have signed to see if you signed (unwittingly) authorization for them to proceed.

Answer 2

You should get your earnest money back. You may still be expected to pay for the survey and appraisal, but the bank may eat that cost in hopes of keeping you as a customer.

Personally, I would refuse to pay that money to the bank. They misled you, either intentionally or on purpose, with a low interest rate then changed it on you. Because you cannot close on the house now, at least not with them, the appraisal does you no good and I wouldn't pay for it.

Answer 3

At the time of your purchase agreement, the lender you are working with should have quoted you rates and asked if you wanted to lock that rate or float that rate. Rates flucuate daily and they have been very volatile as of late. If you chose to float the rate it was your responsibility to maintain contact with your loan officer about the status of the rates. It is up to the borrower to make the decision. You are not working with a very good loan officer if you let them make the decision for you. They do not have a crystal ball..........Rates are only good when you have a contract written and then they are only good if you decide to lock the rate. If you choose to float, rates are a moot point. You have risks with floating, rates might go up and you have risks with locking, rates might go down. Find out the difference in the payment and if you love the house and can handle the payment proceed with the transaction. If what you are doing is really trying to get out of your contract, you have your out since your agent put market rates in the contract. Appraisals are hard costs - the cost is yours. My guess is that the rate is about .375% higher than originally quoted, which is not all that much.

Answer 4

The earnest money will be returned granted the buyer and seller both agree on this. You will most likely have to pay for any expenses that have occured. Do some checking with other banks/mortgage brokers, there are a lot of them maybe you can find the deal that you wanted.

Answer 5

Yes it confusing.The BOE rate is a base rate on which the finance industry calculates its final rate which takes into account the costs of running the business and to generate a profit.The rate charged to you will not only include these costs but will reflect other Market forces, such as, can they lend the money to someone else at a higher rate,Banks also lend to each other and to attract money may be willing to pay more than you would, so to be competitive with other people and businesses you will find the market rate to borrow has gone up.Finaly as the ecomomy starts to warm up a bit Banks will have to increase the rates they pay to ordinary investors,for example ISA rates are slowly creeping up.Not very scientific re[ply but rough nuts and bolts.

Answer 6

The terms of your sales agreement in relation to your interest rate are not binding on your lender. If you did not lock your interest rate and rates have increased the rate you were originally quoted may no longer be available wihout buying the rate down.

As the rate you were to obtain was written up in your sales agreement you may be entitled to withdraw your offer since that rate is no longer available and, perhaps, be entitled to the return of your earnest money deposit. The funds paid for the survey and appraisal are for services rendered in relation to your purchase attempt and those vendors deserved to be paid for the services rendered at your request.

You should have locked your rate at application if that rate was still available on that date. If it wasn't, your loan officer should have so advised you so that you could have either locked at a new rate and so protected yourself from future increases, chosen not to have made made loan application, or amended your sale agreement.