Help with mortgage refinance dilemma
Hi BP,
I am currently going through a mortgage refinance with a national bank on an owner occupied property which has a HELOC in the 2nd lien position with an expected closing date of Feb 25. At the time of application, I specified the intent to subordinate the lien under the new mortgage and also checked with my local bank to make sure that it wouldn't be an issue. For more background info, I sent all required documentation to my loan processor 2 weeks ago and my rate lock of 3.5% will expire mid-March.
I receive a message today ( a day before the expected closing date) that Due to the need for my new bank to subordinate the HELOC under my newly refinanced mortgage that my closing date will be moved to the end of March. If I pay off my existing HELOC, I can expect to close before my rate lock expiration date mid-March.
This creates a dilemma:
Paying off my HELOC will cause me to pay an early termination fee of ~$1500 with my local bank. I intended to use my HELOC for my next investment property. However, The new refinance at 3.5% will allow my property to positively cash flow around $300 after accounting for cap ex, vacancy, maintenance & management.
Do I pay the fee to close the HELOC, reapply for another HELOC for investment and close before my rate lock expires? OR do I try to subordinate my HELOC under the new loan but run the risk that mortgage rates go up by the end of March effectively decreasing my cash flow amount?
Lastly, I was assured on multiple occasions that as long as get my documents sent in a timely fashion that I will close on time. I have fulfilled my obligations well in advance with the new bank I am refinancing through. I have suggested that my loan processor send the subordination agreement directly to my local bank but was told that a 3rd party title company needs to request it and therefore the projected time to close is the end of March. Do I have any rights as a consumer or ,more importantly, what are other options I should be considering?
Thanks!