We had our offer accepted on 11/17 and were pre-approved by Bank A. Our closing date is 12/16. We’ve locked in a rate of 7.375% with Bank A and started the process, but we haven’t finished underwriting, submitted all our documents, or received final loan approval yet.
I’ve been shopping around and found Bank B, which is offering 7%. If they can still close by 12/16, would it be worth switching, or is it too late to make the change? Also, would there be any penalties for doing this?
If you can, jump ship to Bank B. If pushing the closing date is an option, go for it. Most people won’t mind closing a week or two later. Talk to your realtor to see what your options are. If it’s a VA loan, you could also just roll with Bank A and plan to refinance later.
Switching lenders now is doable but tight. You need to act immediately and make sure all your documents are ready to submit to Bank B. Once their initial disclosures are sent and underwriting starts, it’s possible to meet the 12/16 deadline if everyone works fast. If Bank A got an appraisal waiver, Bank B might be able to get one too.
That said, is 0.375% worth the potential stress and risk of switching so late? Bank A already knows your file and can meet the deadline. Compare the payment savings with the potential headaches before deciding.
Rin said: @Frost
It’s about $40,000 in savings over the life of the loan, so it seemed worth it to me.
It might not be worth it, especially if you plan to refinance when rates drop. Big banks like Bank A can be slower, but if they’re already far along, it’s less risky to stick with them. You could still ask them to match Bank B’s rate. If they won’t, talk to your realtor about someone who can move fast.
Rin said: @Frost
It’s about $40,000 in savings over the life of the loan, so it seemed worth it to me.
Most people refinance within 7 years, especially if rates drop in the next year or two. Consider if the savings justify the effort when you might not hold this loan long-term.
@Frost
Switching this late is a lot of hassle for limited gain. You’re almost guaranteed to refinance before you see major savings from the rate difference.
Oli said:
What are your loan contingency deadlines (inspection, appraisal, loan approval)?
I need to check, but our appraisal was waived, and the inspection is already done.
Ask Bank B if they can secure the same appraisal waiver. It’s not too late to switch, but you need to pick a lender today and submit everything immediately to stay on track for the 12/16 closing.