Need Mortgage Advice & Opinions!

[bmagnant]

So I have a mortgage locked in at 5.25%. At the time the rate was a little bit higher than I might have found elsewhere, but the 'ease' factor made up for it. I am converting a construction loan, so it was just a matter of updating a few things to get the conventional loan. I paid a $1500 rate lock fee.

Now the CU rate is 5.0% I would gladly forfeit my rate lock fee to get the 5.0%, but I am being told that once a lock is in place, they won't give me a lower rate, even if my lock expires! So they are going to charge me 5.25% no matter what!

I would most likely get 4.75% or 4.875% if I go outside the CU. I know it's just a business transaction, but I feel almost guilty about looking elsewhere. If I go outside the CU, I'll have to start the process from scratch... but .75% adds up to a lot of money over the length of the loan...

What should I do???

Message Edited by bmagnant on 10-06-2009 09:09 AM

[ShanetheMortgageMan]

Realize the difference is .250% or .375%, which is still pretty significant, but not as big as .75%.  You have every right to check out other lenders, that is one of the biggest sticking points in refinancing, making sure you are getting the best deal possible, a few hundred bucks in fees isn't much, but .25% more in rate is something to consider.  I'd check out other lenders, don't let them know your situation with the CU, so they quote you their honest rate & fees that could be locked in today.  Once you have found the one, let the CU know the situation so in case they can offer you their current rates, you give them one last chance.  However realize that locking in an interest rate is the commitment you make to the lender, the counterpart to the lender making their loan commitment to you.  It's not illegal to break the commitment, and there are no financial repercussions (perhaps other than future opportunities at the CU) unless you signed a cancellation agreement as well as the lock in fee.

[bmagnant]

WOW! My math sucks! I don't know where I came up with .75 lol!

I spoke to another broker that I worked with before and he told me to relax and take a deep breath. So that's my plan. He said he might be able to get me in at 5.0, but he told me if I had everything done already and the appraisal was good I should just sit tight. So I'll ask the CU if they can do anything... be prepared for no, and just get the loan funded. 

[bmagnant]

The CU called... I can waive my rate lock at any time. I lose the $1500, but I don't risk my loan or anything. Just waive the lock and get the prevailing rate.

No drama, no angst! That was a totally wasted day of worrying!