Author Topic: Mortgage Refinance Question  (Read 1099 times)

jhlr

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Mortgage Refinance Question
« on: June 30, 2016, 03:47:57 PM »
I am refinancing my mortgage.  At the start of the process, I contacted two mortgage brokers and one was an 1/8th% lower rate at the same closing cost; I went with that guy (broker A).  A week later the other broker (broker B) said he could do 1/4th% lower than where he was.  I asked broker A if he could roll me down and he said he could not.  My question is, is it okay to leave broker A for broker B after his firm has done some work on the loan already?  I know I have legal obligation to broker A but should I still stick with him? 

TheGrimSqueaker

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Re: Mortgage Refinance Question
« Reply #1 on: July 01, 2016, 09:27:46 AM »
I am refinancing my mortgage.  At the start of the process, I contacted two mortgage brokers and one was an 1/8th% lower rate at the same closing cost; I went with that guy (broker A).  A week later the other broker (broker B) said he could do 1/4th% lower than where he was.  I asked broker A if he could roll me down and he said he could not.  My question is, is it okay to leave broker A for broker B after his firm has done some work on the loan already?  I know I have legal obligation to broker A but should I still stick with him?

What did you sign?

GrOW

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Re: Mortgage Refinance Question
« Reply #2 on: July 01, 2016, 09:55:49 AM »
Legally - agreed that you need to read what you have signed. I doubt that you are obligated for much. Maybe any prepaid items like an appraisal. But it's best to double check.

Morally - broker A provided you a quote matching your need and you accepted. Acceptance likely included a rate lock. Afterwards rates may go open, down, or both but it doesn't change your original need and subsequent agreement. If you were shooting for a lower rate, you could have started the process with broker A but waited on a rate lock.

I won't say this is black and white for everyone. Me personally, I would stick with broker A. Now should the rate change by a lot more, say 0.50%+, I bet there is a point were my morality begins to crack.

dpfromva

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Re: Mortgage Refinance Question
« Reply #3 on: July 07, 2016, 11:46:13 AM »
Agree with read your contract. After that it's personal decision what you are comfortable with. For me, Broker A and Broker B are 1) not my friends and 2) not businesses I'm going to be dealing with multiple times in the future. That argues (theoretically, not comfort zone-wise) for hardball. Broker A and B, if they are good at what they do, will not hesitate to get the best deal they can when they sell your mortgage and servicing rights. So I would ruthlessly go for the best rate. Maybe you can get a bidding war going  . . . 12.5 basis points ain't chump change over the life of a 30 year mortgage.
I cancelled a refi day of settlement after redoing some financial calculations, my Broker A was pressuring but I determined it wasn't worth it (it was a trade off with rate vs. losing the mortgage insurance). Pulled the plug even after sinking appraisal and title search fee (that's why they're called sunk costs; don't include them in your going-forward analysis). When rates dropped again and I had more equity, Broker A wouldn't return my phone calls. Found Broker B and got a good deal. Broker A's loss and not my problem.