Need advice on switching to new lender

Asked by Cycle87, 85048 Wed Mar 20, 2013

I have only 10 days before the closing, but I'd like to switch to new lender. How can I do this without cancelling the current purchase contract(the seller is fannie mae)? the current broker is asking too much closing cost( I found out recently) and higher interest rate. How can I say this to seller? any advice? Would seller accept my request to change to new lender and put off the closing date by 2~3 weeks? my new lender is about to issue conditional loan approval in a one or two days. thanks!!

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Cycle87’s answer
Cycle87, Renter, 85048
Mon Mar 25, 2013
Update:
The seller does not accept our request of extension, and asked to close by the end of month. So if I let it pass now, can I resubmit offer again when the home is back on market?

Thanks in advance.
0 votes
ryateslenders, Agent, Plano, TX
Sun Sep 1, 2013
Before cancelling the loan with your current lender you need to get approved and compare a gfe with a new lender. If it makes sense to switch then you could hopefully have loan approval within 10 days with the new lender. Tell the seller you had to switch lenders, with a loan approval they are unlikely to put the home back on the market. Extensions happen all the time in real estate for various reasons..
0 votes
Doug McVinua, Agent, Gilbert, AZ
Sun Mar 24, 2013
My guess is you have about a 50/50 shot with the seller. Depends on the property, the demand for it, the asset managers mood, your agents presentation, the cause presented etc.

The Seller (Asset Manager) most likely prefers Homepath due to no appraisal for one.

Are you prepared to pay any penalty for the delay?

Asset Managers are often paid on performance and closings per month is typically one measure.

Unfortunately with the low inventory we are in a sellers market for most price ranges.

Good luck and keep us posted.
0 votes
Cycle87, Renter, 85048
Sun Mar 24, 2013
Yes, I talked with new lender, and the fees are related to HomePath. I got the commitment letter from new lender, and I'm going to ask my realtor to talk with the seller tomorrow. I really do not know how much chance I have for the seller to extend the closing date with my new lender. Any experience like this? Thanks
0 votes
Doug McVinua, Agent, Gilbert, AZ
Fri Mar 22, 2013
Have you spoken to other lenders about the fees? Are the fees related to HomePath?
0 votes
Cycle87, Renter, 85048
Thu Mar 21, 2013
Tried to negotiate with current broker. She is very firm, no way to work with further. I think I will talk to seller tomorrow asking extension. I hope the seller agrees..I guess I need to get the loan approval letter from new lender before i talk to the seller. Any other advice?
0 votes
Jennie Miller…, Agent, Phoenix, AZ
Thu Mar 21, 2013
You should speak with your Realtor about this.
0 votes
Doug McVinua, Agent, Gilbert, AZ
Wed Mar 20, 2013
High risk move to change lenders 10 days out with a Fannie Mae contract. Have you talked to your agent about this? What does your contract state?

Why not negotiate with the current lender?
0 votes
Dave Jackson, Mortgage Broker Or Lender, Phoenix, AZ
Wed Mar 20, 2013
Arizona State law is OK with doing this.

The AZ residential purrchase contract lines 81 to 84 state you need to get sellers approval before doing so. It isn't likely the new lender can close in 10 days and by doing this you are also pushing some federal laws on appraisals, unless the existing appraisl can be used and the existing lender will release fast enough.

Fannie Mae has their own addendum. In Fanie's addendum 3rd bullet point there is a date you have to get a "loan Committment" Failure to produce one by that date gives the seller opportunity to cancel sale. And failure to cancel transaction in manner specified means you give up your earnest money.

Your realtor is the person that will be making contact with the seller.

Good luck.
0 votes
Stephanie We…, Agent, Gilbert, AZ
Wed Mar 20, 2013
Fannie Mae has a provision in their addendum that states if your loan does not go thru and you've been approved, you could potentially lose your earnest money. Sometimes the lenders will allow for an extension, but not typically past a certain date in towards the end of the month, but if you do get an extension, you most likely will have to pay a "per diem" penalty. Run the #'s on that vs the excess loan costs you're paying. Really, talk to your agent...they should know all this and be able to guide you thru it.
0 votes
David Brumba…, Agent, Phoenix, AZ
Wed Mar 20, 2013
Fannie Mae is not well known for extending closing. Contact the lender you have with the rates and costs that the other lender is telling you and see if they can match it. Your Realtor can always submit an addendum for an extension and let Fannie decide if they are willing to extend closing.

Good luck,
David Brumbaugh
Zip Realty
0 votes
Korene L. Cl…, Mortgage Broker Or Lender, Glendale, AZ
Wed Mar 20, 2013
Let you realtor deal with the seller's realtor.
Let your new lender get the loan our. Just be ready willing and able to do everything the lender and the realtor asks of you. Time is absolutely of the essence here and any document that is needed is needed NOW.

Good wishes on your new home!
I am a Mortgage Banker that lends in both Arizona and California where I will be pleased to help you. If you or someone you know is looking for financing options, please feel free to contact me or pass along my information. 623-340-0934 Korene Clopine-Seaman NMLS # 218520 KLCSLoanTeam.com We are Direct Lenders, WE CLOSE LOANS! You may hear more information on YOUR Source For Real Estate on Money Talk Radio 1510 AM each Saturday from 12:00 Noon until 1:00 PM
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