I’m in North Carolina. I signed my final loan documents on October 7, and my closing is set for October 16. However, two days before closing, I received a new loan disclosure saying my cash to close has gone up by almost $1,000. This is for a conventional 30-year loan with 20% down. Can a lender really raise closing costs just days before closing after I’ve already signed the final loan terms? This feels really wrong to me. I have my signed copy of the “final” loan cost, but I haven’t signed the new disclosure. Is there anything I can do about this, or do I just have to accept it or back out of the purchase?
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Review the initial loan estimate alongside the final one to identify any changes. Request details about the differences. Certain fees have a maximum tolerance of 10%, meaning they cannot increase by more than 10% after the disclosures, or the lender must absorb the additional costs. Other fees may not have this limitation. Is there a homeowner’s association (HOA) associated with the property? Some of these fees might originate from an HOA transfer fee.
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There is no homeowners association for the house we are moving into.
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Examine both disclosures carefully, line by line, to identify the changes made.
Take it easy. You haven’t signed any final documents yet, so all preliminary paperwork can still be modified.
Unless you are actually at the closing, nothing is set in stone.
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I’m feeling relaxed and just asking a question on this forum. The last document clearly stated “final,” so I think it’s reasonable to assume those numbers were indeed final. I appreciate your help, though.
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If they didn’t provide you with the keys afterward, it’s not considered final.
Hello, I’m a lender based in North Carolina, but my location is not relevant. Did you manage to review the document and identify the changes? It’s likely that the document you received was your Closing Disclosure, and the lender worked with the attorney to ensure that the pre-paid items that depend on dates (such as property taxes, insurance, and interest) were updated accordingly.
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That appears to be true. I appreciate your reply.
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Congratulations on your new home.
What you signed on 10/7 was not the final loan document since your closing is scheduled for the 16th. Most likely, you signed the preliminary closing disclosure. We don’t always have all the final figures when sending this out, but we are required to provide it to you for your signature no later than three business days before closing. It’s quite common for charges to be adjusted on the final closing disclosure once we receive all the documents from the title company. If you have any other questions, feel free to ask. I’m knowledgeable in both mortgage and title/settlement processes.
I had four CDs. The inspection costs were included twice, and there was also a correction to the title policy cost.
Loan balancing with escrow at closing involves netting fees, such as taxes, between the buyer and seller, along with per diem interest. As a loan officer, I would often remind clients, “this money is for paying your OWN bills,” which is set aside during closing. The required reserves and the net amount can vary based on the state and the timing of tax payments. The loan officer aims to provide the most accurate fees possible, but I usually estimated conservatively to minimize the cash needed at closing. It seems your loan officer took a different approach. I can understand your frustration if you’re struggling with your current cash-to-close situation.
I’m located in Oregon, where property taxes for the upcoming year are typically released in mid-October. I always inform my clients that the timing of their tax bill posting can significantly impact the collected tax reserves.
It seems that more education was necessary to prepare you for this possibility, but there’s nothing underhanded happening here.
It’s normal for costs to differ from your initial closing disclosure. Review the details yourself to see what has changed. Lenders can’t arbitrarily raise their fees to exploit you; typically, any increases are due to factors beyond their control, such as prorated taxes or fuel oil adjustments.
No, it’s unlikely that the loan costs changed; there would need to be a change in circumstances for that to happen.
Please compare the previous CD with the new one. What has changed?
Have you asked your lender why the cash needed at closing has gone up? This situation is quite common. While lender fees are typically fixed, it’s possible that title fees, HOA fees, or other charges have increased.
If you decide to withdraw from the purchase, you’ll forfeit your earnest money and may face other consequences.
I recommend reaching out to your lender for an explanation regarding the increase. They’re not trying to take advantage of you (most likely).
The increase likely stems from adjustments related to the overall balance with the title. Common factors could be taxes, insurance, or per diem interest. Review and compare it with your most recent estimate before the increase.