Real Estate Matters

Try to get current lender to match bank's refinancing rate offer

By Ilyce R. Glink and Samuel J. Tamkin
Friday, December 3, 2010; 10:25 AM

Q. Two months ago, I applied for refinancing with my current lender and was offered 4.875 percent (90-day rate lock) compared with my current 5.75 percent.

I was told I could back out anytime and the cost to me would only be the appraisal cost of $380 and the cost of the survey. Both of these were charged to my credit card and the appraisal was done and was more than enough to qualify for the loan.

For the last four weeks, I have been e-mailing and leaving messages asking if we can lower the rates, given that these have come down, and to get updates on the loan processing.

The loan officer responded that closings were averaging 75 days and that we were only 50 days into the loan application. He did not respond to my interest rates query. I read the fine print in my loan application, and there is no clause about penalties of canceling, not pursuing or closing the loan.

Yesterday, the loan officer e-mailed me requesting more information from me that the underwriter had requested to complete the loan application.

In the meantime, two weeks ago, I checked with my regular bank and I verbally gave them my credit score and the amount from my recent appraisal. On that basis, my regular bank offered me 4.375 percent for a refinance.

What are the strategies and options for me to salvage a better rate given the above?

Do I ask my current bank to send me the loan application and evaluate?

If my current bank offer of 4.375 percent is credible, can I accept it? My crystal ball seems to say that that interest will remain the same for the next couple of months.

Can we borrow your crystal ball?

A. Seriously, if you want to walk away from your application, the cost will probably be the $380 you've already paid for the appraisal and any other costs that have already been paid. You should check the paperwork to make sure there isn't anything else that you will be charged going forward (remember, they do have your credit card information). If not, feel free to move forward with another lender.

You should also call your loan officer and tell him that you've been given another quote for 4.3 percent on a 30-year fixed-rate loan and are thinking about walking away from the appraisal fee unless they match it or make you a better offer.

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