After lock in at 5.875, broker tells me it's now gonna be 6.375-A WEEK BEFORE CLOSING!?

Question

I "locked in" at 5.875% a few weeks ago. It's now a week before closing and my mortgage broker calls to say "Good news, your loan is all ready. But the lender could only do it at 6.375."

He tried to explain to me that when they went to the lender, the best they could do now was that higher rate. This, after I had "locked in" with a deposit and everything. It's even printed right there on my "Good Faith Estimate".

According to my broker, a lock-in doesn't really mean anything. and the lender decided that they couldn't honor that rate because I've got less than two years employment history.

I'm making a 50% down payment, with a 765 credit score and no debt. But it's my brief employment history that jacks up my rate, despite "locking in"?

AM I GOING FREAKING CRAZY???

Please, if you have any suggestions, I'm all ears.... thanks.

Answer 1

i'm a mortgage broker..and i'm telling you to find another lender. this is called 'bait / switch' and it's illegal.

if youremployment is salaried, hourly...then they have no right to do this!
if you're commissioned, self employed, then you need 2yrs

i hope you didnt 'lock in' with a good faith estimate.
the lock in agreement shows your rate..and that you're locking it in etc.

you should get 6% or 6.125% with 1origination fee.

Answer 2

Unfortunately you didn't have a rate lock but a thin promise from an unethical broker. That's one reason that I never deal with brokers -- every one I've dealt with was pond scum.

You only have a rate lock if you have a lock letter from the lender. If you have that lock letter, and the lock hasn't expired, call the lender and tell them that they offered a lock at a specific rate and they'll either deliver or be sued. Better yet, have your attorney make that call.

It's also possible that this broker douchebag came up with a loan from another lender that is much more profitable for him so he's switched you to the other lender.

Lastly, once a broker has hooked you up with a lender, thank him for his services an deal directly with the lender after that. At least that will isolate you from the worst of the worst.

Answer 3

Classic bait and switch. Is this a purchase or refi? If its a refi then just walk away. 6.375% isn't a bad rate its more a matter of dealing with someone who isn't reputable. 5.875 was clearly not locked, and yes, locks do "mean something." So, unless you were turned down for the loan at 5.875%, which the lender would usually let you know in writing, then he never locked it. Or promised you something that he had no intention of delivering.

Sorry, that happened to you. Don't be afraid to walk away!

BTW, dealing directly with the lender isn't an assurance of getting the same price. In fact its usually a guarantee that you won't get the same price. Lenders write loans directly through a retail channel....meaning a large mark up. Brokers operate on the wholesale channel...meaning minimum mark up. But, you can usually have more of an assurance that you aren't being ripped off or lied to by the bank's retail loan officers.....usually.......

Answer 4

Have a lawyer look at that Good Faith Estimate and any other documents they gave you.

Either the broker was lying about the rate lock, OR you passed the expiration of the rate lock, OR he's lying now.

If the rate lock was good but expired, that's one thing, but if it's anything else, get another broker. This isn't the way to take a commitment of this size.

Answer 5

More than likely 5.875 was for an adjustable rate. You damn sure don't want that. 6.3 is probably the best you will do right now with the interest rates high. A bank can actually make more than 5.8 if they invested in a Government backed bond, so why would they lend money for that low rate.

Don't get an adjustable. The only way rates are going to adjust in the next 15-30 years is up. I locked in a fixed rate at 6.5 three years ago with no money down and poor credit with less than two years on my current job. Be happy with the 6.3, besides if you make extra payments the interest rate means nothing anyway.

Mortgage brokers will tell you that you can pay discount points or origination fees to get a lower interest rate. This is nothing more than prepaid interest in exchange for a slightly lower rate. More times than not, the fees don't justify the lower rate. Don't pay discount points or origination fees, they are just quick cash for your broker before he sells your mortgate to a bank right after closing.

Answer 6

BULL**** Look, you go back and tell your broker to tell the lender to pound sand!! We just recently purchased our house and like you, a week before closing we had instead of a 6.8% rate we got a 9.12 %!! Then we found out also that day we were putting down another $6000 to the 30000 we already deposited and our payment that we "locked in" at $1500 is now at $1941. I wish we wouldnt have done it now!!
There is no reason with as much as you are putting down, and your credit score that you should be paying a higher rate. Typically, they look at 6 months to a year employment history. BUT WHO CARES. You have HALF of the money so therefore your BROKER should then say forget it to that particular bank and move on. THAT IS THEIR JOB AND THEIR DUTY TO YOU.
It is not too late for you to back out and if you are feeling a knot in your gut I wouldnt do it. It sounds shady to me. If you have your "lock- in" amount told to you before on paper then they HAVE TO honor it. OR slap them with a lawsuit!!
Hope this helps!!

Answer 7

The preliminary difficulty of your lender putting you in a regular time homestead client application once you're no longer sounds like your lender would not know what she is doing. have you ever owned a house in the previous 3 yrs? First time homestead shoppers are categorised as people who've never offered a house or people who have not owned a sources in the final 3 yrs. i'm able to comprehend that your fee would be larger than a definite first time homestead client fee which might improve your fee yet 3 hundred.00 extra sounds severe. The six hundred.00 extra in last sounds like pay as you go pastime. as an occasion in case you shut on the top of the month you're able to pay in simple terms one million day of pay as you go pastime in spite of the indisputable fact that in case you shut on the beginning up of the month you're paying pay as you go pastime for the the remainder of the month on your last fees which based on the own loan quantity ought to be six hundred. She desires to get a grip on your guy or woman loan status. i might call for to talk to a supervisor.

Answer 8

Put the pen down and then go tell them to pound salt !! They are trying to rip you off. Go find another lender !!