Home Buying in Ramsey>Question Details

Summer Owens, Home Buyer in Hickory Ridge-South...

I'm scheduled to close on Tuesday (in two days) with lender A at a rate of 5.3% with me bringing 3% to closing. Lender B has a rate of 4.625

Asked by Summer Owens, Hickory Ridge-South Riverdale, Memphis, TN Sun Mar 28, 2010

with no down payment and no closing cost. I really want to switch lenders, but I'm not sure of the best approach.

Any guidance you can provide is greatly appreciated.

Help the community by answering this question:


Sean, first of all, this is an old question. However, it might be interesting to find out what Summer ended up doing.
0 votes Thank Flag Link Thu Dec 30, 2010
This is commonly asked question, with more pitfalls than benefits. First to be considered is that a new lender can advertise a possible rate, but can not guarantee a rate as your credit profile directly impacts where you land. So you try and switch only to find out that you are going to land equal or higher than where you are. Second, you have already spent money on Loan Application, Appraisal, and inspection....and will incur these costs again. And finally, this will delay your timeline to close and if the seller does not agree to extend and you move forward on the new lender and they can't perform on time, the seller could seek damages. Shopping for rates is best done at the beginning of the offer process....not when moments away from close
0 votes Thank Flag Link Thu Dec 30, 2010
First you must compare the GFE of each lender. You can also approach the current lender tell him of your intention and possibly they will match the rate.
0 votes Thank Flag Link Thu Nov 18, 2010
I hope you closed already but to assure that you did the best I will explain a little bit the NACA program.

First, you need to go to a 4 hour conversation. Lets think the this conversation will be next saturday. Then, if you ar lucky, 15 days later a metting with a NACA loan officer will happen. If all the documents are correct and it seems that you will qualify, all the paper work will be sent to "Corporate" for a NACA pre approval. An answer will take about 15 to 20 days. Are you counting the days? Then, lets say you already fund the home and right away submit the offer to your NACA office. NACA office, will review the documents and in 2 to 5 days will call you to set up an appointment again, please birng updated documents with you. Metting will take place about 10 to 20 days later. In the time, you will do a required inspection and a termite inspection.

Once you met with the NACA consuelor, all the paper work will be review and hopefully a BANK application will be taken and appraisal order with a Bank file submition. Inspector will uplead the inspection to the HAND (rehabilitation) department for review. If there is any item they think it must be fixed, you could negotiate with the seller , if seller does not want to fix it, then, you will met with a NACA approved contractor who will provide a Quote. (This quote will be added to the mortgage amount) Then 5 to 7 days later, NACA .
Did I mention that HAND review might take 10 -12 days? I don't think so.

Well, this is about half of the proces.

The question is, woud the seller wait for you all tis time?
0 votes Thank Flag Link Thu Apr 8, 2010
Thanks for the extra input! Interest rates are going up...ugh. Yes, the house qualifies for NACA although it is not a low-income area. Also, I have excellent credit and actually bought my first house through NACA and used my extra money to buy down the interest rate which is what I would consider doing in this case as well. Closing was not added to the loan price at that time.

Any thoughts on if I closed with lender A and immediately refinanced?
0 votes Thank Flag Link Sun Mar 28, 2010
Are you sure that the home you are buying is elligible for that program? The home must be in a low to moderate income area, and there are purchase price limits, but no income limits. The rate that Lender A is offering sounds high, however if you have lower credit scores it might be correct. The NACA website now says 4.75%. The idea of no closing costs is certainly appealing, but it is true that you should make sure that you are not adding that in to your loan amount. If you have the money, you might not want to do that.
0 votes Thank Flag Link Sun Mar 28, 2010
Thanks. It's the NACA program naca.com that has no closing cost or down payment. I'm sure closing would have to be pushed back, but I'm hoping the seller is willing to do that as I will be buying the house, and if they aren't willing they would have to start all over and so would I.
0 votes Thank Flag Link Sun Mar 28, 2010
I have yet to see a Mortgage with no closing costs to the buyer. Sometimes they a rolled into the Mortage so now you're paying interest on your closing costs over a number of years. The rates are different but are they for the same loan/terms. Can you still close within the timeframe agreed on your Sales Contract?? Hope it all works out for you.
0 votes Thank Flag Link Sun Mar 28, 2010
You probably don't have enough time to be changing lenders without pushing the closing out. You would need to find out how long it will take the second lender to get everything done that they need to do and you will need the seller to agree. You say no "closing costs", I'm sure either way threre will be some closing costs. What did your buyers agent say?
0 votes Thank Flag Link Sun Mar 28, 2010
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