Changing Lenders After Locking Rates During Mortgage Process

This Article Is About Changing Lenders After Locking Rates During Mortgage Process

Changing Lenders After Locking Rates is allowed. There are no fees and/or costs to borrowers when they decide on Changing Lenders After Locking Rates. Borrowers want the very best mortgage rates they can get and proceed with the mortgage process with the first lender they run into. Borrowers with credit scores over 700 FICO should shop for rates. Unfortunately, lower credit score borrowers with less than perfect credit may not have the luxury. Lower credit score borrowers may often not qualify with lenders with overlays and may be grateful for a lender to approve their loan. However, the mortgage business is competitive for higher credit/income borrowers. Mortgage rates can vary. Borrowers in an active current mortgage process can go about Changing Lenders After Locking Rates if they find a different lender offering substantially lower rates. In this blog, we will discuss Changing Lenders After Locking Rates and starting the mortgage process over with a new lender.

How To Avoid Changing Lenders After Locking Rates

One of the regrets many borrowers have after starting the mortgage process with a lender is the uncertainty if they got a good mortgage rate. One way to avoid Changing Lenders After Locking Rates is educating on the mortgage process. Talk to several lenders and see what they have to say. Take a hypothetical case scenario with loan officers what the mortgage rates are. See what you need to do to get a better rate. There are quick fixes many loan officers can do to increase your credit scores. Just paying down your revolving credit card balances to a 10% credit utilization ratio can boost your scores substantially. Most direct lenders have a FICO Simulator to go over consumer credit score improvement. 

Comparative Shopping For Mortgage Rates And Terms

Mortgage rates differ from lender to lender. If you have high credit scores and are a prime borrower, it is highly recommended that you shop with several lenders before starting the mortgage process.

Main Reason For Changing Lenders After Locking Rates

Over 75% of our borrowers at Gustan Cho Associates are those Changing Lenders After Locking Rates and starting their mortgage process with us. Mortgage rates are not the only issue. Many borrowers get a last-minute mortgage denial or are stressing during their mortgage process because their loan officers have not properly qualified them. Other Changing Lenders After Locking Rates is because of unresponsive loan officers. It takes them hours and/or days to reply to an email, text, or return phone calls. Other reasons for Changing Lenders After Locking Rates is because their lender keeps on reconditioning the file after conditional loan approval. The mortgage process is a process. Most loans take 30 days to close from submission to closing. If borrowers are encountering problems with their current lender and/or loan officers, changing lenders after locking rates may be an option to explore.

Does Changing Lenders After Locking Rates Make Sense

Sometimes the mortgage process can be stressful. Some borrowers may want to take it out to their loan officer and threaten them they will be changing lenders after locking rates. However, borrowers need to consider is changing lenders the best option?  What is the main reason for switching lenders?  If it is a serious matter like a mortgage underwriter nitpicking and reissuing conditions after conditions, then yes, it is a good idea to change lenders. Remember that the whole mortgage process needs to restart if you switch lenders.

Does It Cost Borrower Fees And Costs When Switching To A Different Lender?

Borrowers should not be paying a dime with the exception of a home appraisal. If a lender asks for an upfront application fee and/or credit report fee, go to a different lender. Gustan Cho Associates does not charge and upfront fees including rapid rescore fees with the exception of home appraisals. Borrowers who paid an upfront credit report and/or application fees will not get reimbursed when changing lenders. 

What Happens With Home Appraisal When Switching To New Lender

FHA And VA Home Appraisals can be transferred from one lender to another. If a home buyer already paid for an FHA and/or VA appraisal, they can transfer it without ordering a new appraisal when switching lenders. On conventional loans, conventional appraisals cannot be transferred from one lender to another. There is no reimbursement on conventional appraisals by the exiting lender. Many times, the new lender may pay for a new appraisal without charging the borrower.

Here are HUD Guidelines ON FHA Appraisal Transfers:

Locking Rates During Volatile Markets

Nobody has a crystal ball. Many loan officers speculate in locking mortgage rates thinking it will get lower. This practice never works. Rates go up and down. Sometimes rates change hourly. Once a rate is locked, you need to take that rate unless you switch lenders. Switching lenders just to avoid a mortgage rate lock is a risky move to take. Rates can skyrocket by the time you are settled with the new lender. If rates have dropped significantly, talk to your current lender and see if you can get the lower rates. If they say no, tell them you are switching lenders.

Starting New Mortgage Process With New Lender

Changing lenders during the mortgage process is not difficult. However, the new lenders will need to issue new disclosures and Loan Estimate. All the files that you submitted to your first lender will need to be resubmitted to the new lender. FHA and VA appraisals can be reused and buyers do not have to order a new appraisal. The loan needs to relocked at the new lender. If it is an FHA Loan, the mortgage processor at the new company will requirest an FHA Case Number Transfer.

Will There Be Closing Delays When Changing Lenders

Borrowers thinking of changing lenders are often concerned about mortgage closing delays. The mortgage process depends on the individual lenders. We will discuss our mortgage process timeline at Gustan Cho Associates. If it is an FHA and/or VA Loan with a completed appraisal, we can normally close the loan in 7 to 10 business days. If we do not have an appraisal, it will take 14 to 21 business days. Our policy at Gustan Cho Associates is they get priority and our support staff work late evenings, weekends, and holidays. For any questions on this topic matter, feel free to contact us at Gustan Cho Associates at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. The team at Gustan Cho Associates is available 7 days a week, evenings, weekends, and holidays.