Mortgage rate changed 24hrs before closing?

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I had what I thought was a locked-in mortgage rate at 4.625, and the loan officer informed me the day before closing that the rate would be 5% because of some new regulation that he had just found out about two days ago. I have a “good faith estimate” with a quote of 4.625 on paper, but now pressed to close with the property manager threatening to keep a $ 3k deposit if I don’t close, I’m lost for words. Any recommendations?

This is not a jumbo loan, and I talked to a mortgage guy who quoted me at 5.5 – 5.75%. Just not sure if it’ll go down more.

  1. Reply
    February 19, 2011 at 3:22 pm

    Look through you paperwork with the 4.625 signed by the lender and you. Don’t have one then you did not lock in and have no recourse.
    Have a signed contract then your loan officer can just forget the 5%
    Had that happen in 1990 but organize me, dug out that locked in, signed contract and had no problem What you think and what you actually did are two different things

  2. Reply
    February 19, 2011 at 3:32 pm

    FED cuts have no direct impact on mortgage rates. They are very indirectly correlated. If that is what he quoted you then maybe that’s the best he can offer you.

  3. Reply
    February 19, 2011 at 4:02 pm

    I heard that some banks were offering 4.99% on a 30 fixed, no closing cost loan.

    It was on a Real Estate Radio Program in the LA area.
    97.1 fm. You should be able to find them on the web,

    If they have logs of past shows you might be able to find the advertiser.

  4. Reply
    February 19, 2011 at 4:36 pm

    In my experience interest rates for residential real estate tend to be the lowest in the months of November, December, January and February.

    I suspect that the reason for that is during those months the demand for houses and Mortgage money is the lowest.

    When the spring market gets going, generally interest rates on Mortgages go up, probably due to the increased demand for Mortgage Money..

    I would estimate that we are probably at the bottom or very close to it for residential Mortgage interest rates this year.

    The rate that you mention, if that is a 30 year fixed, no points and no fees sounds very good. I would grab that rate and lock it immediately.

    I have found that trying to pick the absolute rock bottom on interest rates is like playing the children’s game, “musical chairs”. You do not know exactly when the “music” will stop. You want to make certain that you have a “chair” when the “music stops”.

    The same is true on interest rates. The “music” stops about this time every year. I do not know exactly when the “music” will stop, but I do know that the “music” will stop very soon. I recommend that you grab a “chair” now,.

    In this case I recommend that you grab that rate, because the rates will start goiing up very soon.

    (edit) I see that some people above me say they know of lower rates. In my experience many people in the Mortgage Industry are bait and switch artists.

    They offer ridiculously low rates to get you to sign up with them and then they switch you to a higher rate. If the person that you are dealing with is someone that you know to be honest I would stay with them and take that offer. A 30 year fixed at 5.5% or even 5.75% no points no fees is a very good rate.

    I would not go chasing the rates below 5%, in my experience they do not exist.

    That is just bait to reel you in to switch you to a higher rate later when it is too late for you to do anything about it.

    I recommend go with the guy you have got. (as long as you know that he is honest)

    Do not go after the under 5% bait or you may wind up with a hook in your mouth, and believe me that is no fun.

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