So, if I locked my rate at 5% with no PMI, now the rate is 4.725% with no PMI....

Asked by Clthomebuyer, 28277 Mon May 16, 2011

...the loan was approved and is at the attorneys office, we have 30 days till closing still... Can't I cancel my loan and just apply again since there is a no-float option? I would love to get a lower rate. This sucks.

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Gregorio Den…, , San Diego, CA
Mon May 16, 2011
I bet it would suck more if rates went up by .25 and your lender wanted to cancel your loan.
If you don't have a float option, then you cannot just cancel and reapply at the same lender, there is usually a waiting period before you can re-lock without being subject to "worst case" pricing. You could always go to a different lender but that's risky and if it's a conventional loan, you will most likely have to get a new appraisal done. Is.25% really worth it? How much does it change your payment? The 5% was good enough for you when you locked and just because rates are lower, does not mean you are entitled to get that rate. A lock is a commitment on both parties and you certainly would not like it if at closing the lender were to raise your rate. Close and be happy, too many things can happen in this lending environment to risk starting from scratch for .25 in rate.
2 votes
Daniel Fisher, Agent, Charlotte, NC
Mon May 16, 2011
You can cancel, but before you do, you need to count the total cost and the risk that you will not get approved again.

My suggestion to Buyer clients in this situation it to explore what a rate buy-down would cost. 0.275% is not that great a difference in the overall financing. I would also encourage you to look at amortization schedules for 5% and 4.725% and study the effect of shortening the loan repayment period that would result making early payments to principle to accellerate the payoff during the early years of the loan when interest payments are highest.

If you change loans, you would probably need to use a different lender.

If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. ...and if you like this answer, please give it a "thumbs up".
0 votes
Jan Teel, Agent, Matthews, NC
Mon May 16, 2011
If you use a different lender and pay the appraisal and application fee again you could possibly get a new loan. I have used Johnatan Romero with New American and had the process go very quickly. You could have a new loan approved and have the package to the attorney in less than two weeks. Johnatan's number is 704-577-3028. I hope this helps. (New American has some of the lowest closing costs, as well.) You will need to weigh the cost of starting the new loan against the cost of an appraisal and an application fee. If you plan to stay in the house for a few years it should pay for the difference for an interest spread of 1/4 of a %.

Blesssings upon you...
Jan Teel
TEEL Realty
704-641-0267 (cell)
0 votes
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