Having your rate changed at closing is a
terrible situation and can really upset you.
Unfortunately this has happened to too many people at
closing and especially during a purchase, consumers feel
that they are stuck with the higher rate because of
everything that is scheduled to happen shortly after
closing. Sellers have a moving day and truck scheduled,
you have a moving day and truck scheduled, you most
likely need to be out of your current residence on a
certain day, that is probably within days of closing,
you could possibly lose your earnest money deposit, you
will have to go through the whole financing process
again if you decide not to close and accept the higher
rate, and possibly many other problems could result by
you not accepting the terms of your loan approval.
Therefore, if you rate changes at closing you need to
know your rights and what options you have. If you arrive at the closing of your mortgage and discover that your interest rate has changed from the original quoted rate there are some things that you can do as a consumer.
First of all, you should discuss the situation with your loan officer before you sign. There is probably a good reason for your interest rate to have changed, and they will be able to explain the situation. If you didn't pay to lock your interest rate, then it will move up and down with the market. It is possible that the interest rate went up because of changes in the market. This is beyond anyone's control, and the only way to avoid it is to lock your rate.
Carefully look over the HUD Settlement Statement for errors. Make sure all the factors of your loan, such as down payment, purchase price, term, etc. are correct. If any one of these is an error it could be the cause of the rate change.
If your rate has changed at the closing from what you were quoted originally and throughout the processing of your loan, you need to speak up and ask your loan officer why there is a difference in interest rate. This is one of the oldest tricks in the book that is performed by shady loan officers, especially on purchase transactions where you have to close by a certain date and most home-buyers will just accept the rate to close and get the whole mortgage process over with so they can move into their new home. Sometimes there are valid reasons as to why your rate increased but it should not come as a surprise to you at the closing table. You should be notified before you ever sit down for your loan closing. You should always ask your loan officer to provide you with a rate lock confirmation so that you have proof in writing that your rate was locked ahead of time and you will avoid this problem from ever arising.
No matter what the reason for the increase in interest rate, keep in mind that you are under no obligation to sign the closing documents. Although your loan officer may have the best intentions, ultimately the decision is yours.
If your mortgage interest rate changed at close of your refinance transaction, please be advised that you have recourse under federal law for 3 days to rescind the documents you have signed. This is called a 3 day rescission period, which may provide you with sufficient time to work out your issues, if not with the lender who closed you, then with an alternative lender of your choosing. This rescission protection is designed to be used only in extreme circumstances, however it is available should dramatic differences be present in the documents you signed at closing compared to the approval you received before.
Be sure that when your broker says that your rate has been locked to get a lock confirmation to ensure that your rate is what they say it is.
If you rate is different at closing than what was agreed upon at the signing of RESPA documents, then you are more than likely a victim of a "bait and switch." If you Loan Officer refuses to drop your rate to what was agreed upon, call [name] at 888-418-4467 and explain your situation.
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as soon as possible. Thanks!
Information listed above is to be used for educational purposes only and is not guaranteed