Financing in 19148>Question Details

aef468, Home Buyer in Philadelphia, PA

I have a mortgage commitment, but the house will now NOT be done by the expiration date of the commitment letter.

Asked by aef468, Philadelphia, PA Wed Oct 27, 2010

I have a 60 day commitment letter signed on Oct. 10. Orginially, the closing date was Nov. 12, then it was Nov. 30, but now it is DECEMBER 30th and that change came AFTER I got my mortgage commitment letter. I hope it won't change again. But it is new construction, and in Philadelphia, so bad weather may push it back. My questions are: Does the seller now need to pay for the extension? How much is it to extend the mortgage commitment, since I locked in my rate?

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Hi Aef468,

How are you? Thank you for your online inquiry. Sorry to hear about your delay of your new home construction purchase. I would suggest you to speak with your mortgage loan officer and see if he/she could offer you a re-locking of the rate without any penalty. Come to think about it, the rate now could possibly be much lower and better than 60 days ago when you locked it! If the loan officer cannot resolve your issue, try speaking to his/her manager or the top management staff to see if they could resolve your issue.

If all fails, you could try to consult with a lawyer and see what they can do for your situation. Hope that helps and good luck with everything!

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Phong Lam, CSM
CENTURY 21 Advantage Gold
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Philadelphia, PA 19145
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1 vote Thank Flag Link Tue Nov 2, 2010
Call your specific Mortgage Advisor. It may be other documents expire. That can be fixed easily ---Check with the mortgage person on their extension and re-lock policites ---If rates are lower you may be able to let this rate expire and relock 30 days later --you may get an extyension for minimal; costs --what you want to aviod is extending and not knowing the 2nd extension policy --in the event you need one. Every investor has different extension and relock policies.
1 vote Thank Flag Link Thu Oct 28, 2010
Hello aef,

You have a couple of options. Ask your Realtor if the seller will pay for the rate lock extension.
Ask your broker what happens if you want to extend the rate lock. Ask your broker if he can switch lenders and re-lock the loan and save you some money. if you have an FHA loan you do not need a new appraisal so it will not cost you anything.
My suggestion is the latter. It may actually save you some money.

Best Regards,
Alan Openshaw
Cornerstone Lending Inc
720 Second St Pike Suite 104
Southampton Pa 18966
1 vote Thank Flag Link Wed Oct 27, 2010
Your agent can ad an addendum that says that if you cannot settle by a certain date because construction is not finished then the seller must pay a penalty in the form of money back, lower price or more amenities.
1 vote Thank Flag Link Wed Oct 27, 2010
Your situation could be more complicated than you see it. If you don’t have a REALTOR who represents you try to get an advice from attorney.
0 votes Thank Flag Link Wed Oct 27, 2010
Your commitment may expire because of something else, so please clarify if you have a 60 day rate lock, or a commitment that expires, which could possibly be because of something else.
On new construction, I doubt that you can try to get the seller to pay an extension fee. I would say it is your loan officer's fault, knowing that you were buying new construction, not to realize that you have to know more about when the house will be ready before you lock in a rate. What you may want to do, is have them cancel your rate lock now, and relock it at a much later date. I know you are probably locked in at a very good rate, but a good rate is only good if you can close during your rate lock period.
0 votes Thank Flag Link Wed Oct 27, 2010
As far as the cost to extend the locked in rate, the mortgage company can answer that. Every mortgage company has their own policy.
0 votes Thank Flag Link Wed Oct 27, 2010
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