There are many reasons why you might consider switching mortgage lenders. However, several factors should be considered before making the switch.
So you’re in the process of buying a new home, and things are progressing smoothly. Your mortgage application has been accepted, and almost all the paperwork is done. But then, a few days before closing, you get a call from your loan officer with some bad news —the interest rate on your loan has gone up. Suddenly, the deal you thought you had is no longer looking so good. So what can you do? Is it possible to switch mortgage lenders?
Is It Possible to Switch Mortgage Lenders?
Yes, it is possible to switch mortgage lenders before closing. However, you should only do it if you are absolutely convinced that the new lender provides a better deal than your current one.
Why You Might Consider Switching
There are many reasons why you might consider switching mortgage lenders. Perhaps the most common reason is that your current lender no longer offers the terms and interest rates you need. In this case, it may be worth looking into other options to find a lender that can provide you with the financial security and stability you’re looking for.
Another possible reason for switching mortgage lenders is if your current lender is not offering prompt or reliable customer service. Whether they are slow to process applications or unresponsive to your inquiries, poor service can leave a bad impression and make you want to switch to a new lender.
Other reasons may include:
- Misplaced paperwork or documents
- Constant changes to whom you’re working with
Disadvantages of Switching Mortgage Lenders
While switching lenders can be a good way to secure a lower interest rate or adjust the length of your repayment term, several disadvantages should be considered before making the switch, including:
- Closing Delays – Switching mortgage lenders can sometimes lead to delays in the closing process. This is because the new lender will need time to process, review and verify your application. In addition, the new lender may have different requirements or guidelines that need to be met before the loan can be approved. As a result, the entire process can take longer than expected and cause significant closing delays. These delays can even cause the deal to fall through entirely in some cases.
- Additional Costs – When you switch mortgage lenders, you’ll likely have to pay any outstanding fees and penalties to your current lender and any associated closing costs on your new loan. In addition, your new lender may require you to pay for a property appraisal and title insurance. These costs can add up and offset any savings you might get from switching lenders. As a result, it’s essential to do your homework before switching mortgage lenders. Otherwise, you could end up paying more in the long run.
As you can see, it is possible to switch mortgage lenders before closing. However, be sure to crunch all the numbers before switching lenders to ensure it’s the best option for you.
Contact Better Rate Mortgage Today
Are you in St. Louis and looking for the best mortgage deals? You’re in the right place! At Better Rate Mortgage, we have a wide variety of mortgage products to choose from, and our experienced team of loan officers will work with you to find the perfect loan for your needs. Contact us today to learn more!