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Renigotiating a rate lock / finding another lender

I'm locked in with Chase on a 30 year fixed conventional 20% down. Loan of about 350,000, both me and my wife have great credit. Rates are now about .125-.25% cheaper. They wont renegotiate until we are within 30 days of closing, though once I am within 30 days of closing I have a lot less time to contact another lender if Chase decides not to renegotiate. They also told me if I did apply with another lender they would find out and cancel my loan. Is that just a threat to keep me from looking around, or is there actually some rule that says I can't work with 2 banks at once?

Thanks
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October 10 2011 - Bergenfield
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Answers (3)

Be careful as the market has gone in the wrong direction for now 5 days in a row so the rate that you do have may not be so bad.  Doesn't hurt to look around since I am guessing you have some time before closing.  However expect Chase to cancel your loan once they find out you are working with someone else.  Therefore make sure the ship you are going to jump to is not going to sink when you get on board.  Happy to offer a second opinion on your loan.  Contact me through my profile.
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October 11 2011
within 30 days of closing says you may have a long term lock. Locks of 90 days or more often have a a float down provision within 30 days of close.

Canceling your loan if you start a mortgage elsewhere isn't a threat, it's a sound business decision. They don't want to be in the position of finding out later that you have taken out two first position mortgages on the same home, it could costs them a lot of money due to having an unsaleable loan.
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October 10 2011

Hi Bergenfield,

You are not obligated to work with Chase if you change your mind. But before you take the leap to a new lender be sure to assess the big picture. Not sure if you are doing a refinance or purchase, but am assuming it's a refinance? My advice below is based on a refinance and doesn't assume this is a purchase transaction. I suspect you took your time to interview a few mortgage lenders to get a sense who would best fit your needs. Now you find yourself locked, but see rates are getting better. If you have a good relationship with your lender, hopefully he can work with you to renegotiate the rate down if there is indeed a precipitous drop. Or help guide you to find more information about the other lender before you make your decision to leave.

I can't speak for Chase, but when I lock loans for a client, our bank sets aside those funds and protects your rate should they go up. If rates get a little better than I don't have the leverage to renegotiate a better rate for my client and I explain this in my initial interview. But, if there is a .25% improvement to rate then we have some wiggle room to work with our investor to drop the rate. Working with 2 banks at the same time is frowned upon because there is a lot of work being done on your behalf behind the scenes before one pays for the service.

Personally, If you were my client I would thank you for bringing your plan to go with a different bank to my attention. Then I would check with our lock desk to see if there is anything I can do to keep you as a client. If I had the misfortune of locking and protecting your rate, only to see rates go down, I risk losing a good client due to the market swings. It's nothing personal and I understand this is nature of the business. I would stop working on your file and allow my team focus on my active clients. I wouldn't threaten you with cancelling the file, because I have had clients jump to other lenders only to see them come right back because they are unhappy with the service or were promised something that bank can't deliver. Your file would stay in active status until the lock expires.

I don't if this post helps or not, but I am always available to talk if you have questions.

All my best,

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October 10 2011
 
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Renigotiating a rate lock / finding another lender
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