Should I change to a different lender?

Question

My fiance and I have signed papers (yesterday) with a lender we chose a couple of weeks ago from a different house we were going with. We ended up backing out of that deal and found a new house. We got a competative rate locked in (6.75) but another lender/bank offered the same rate but with 1000 off the closing costs. Is it worth it to switch for this incentive? We had our lender match this, then she told us that to get that 1000 off we'd have to increase the percentage to 6.85 to get it. My fiance is up in arms about this and was bitter to sign all this paperwork with her in the end. Now he's holding it against me saying I should have made the phone calls before hand to figure this all out. Are we screwed now or can we do something about this?
Thanks!

Answer 1

This $1,000 deal could cost you thousands down the road if you don't compare everything.

Uninformed lenders miss things like pre-payment penalties, transaction fees, late fees, processing fees, duck duck goose fees that lenders tack on to compensate for something, either low percentage rates, reduced closing costs, etc., etc..

Calculate what that percentage rate change will effect over the term of the loan, see if that $1,000 is worth it.

Answer 2

Before either of you get all wound up over $1000 'off closing costs', find out exactly what those closing costs are. If your first lender has, as an example $2000 total closing cost and the new lender has a $4000 closing cost with $1000 off, on which one are you farther ahead ?

Find out all the pertinent information regarding the stated closing cost, and then make your choice from there.