Switching lenders during escrow

5 Replies

I asked this question in a different sub-forum and only had one reply, so I am asking here on the General Real Estate forum. I am looking for some perspective as to whether this is a bad move or not.

 I am a first time home buyer and have been working with a mortgage broker for the past 3 months or so. I am currently in escrow, and it dawned on me that I should have shopped around for my mortgage rather than just go to the broker suggested by my realtor. So I stopped in at my Credit Union and sure enough they offer me a better percentage rate (4.125 vs 4.375), no points and pay for the appraisal (saving me $545 in closing costs and a quarter of a percentage point).

I like my broker, but...

Purchase price of $205k. The loan is conventional, 20% down. ($164k loan)

What would you do? Any mortgage brokers or loan officers want to weigh in?

I feel bad switching but also feel that I need to be financially smart here. 

How far along, exactly, are you?  If you have 30 days or so, or if the seller will agree to an extension, go ahead.  But first, confirm what you think you found, then tell your current mtg broker, he may can do better.

Your real estate agent should not be getting any sort of kickbacks from the broker - so they shouldn't care who you get your loan from. In fact, if you can get a cheaper mortgage payment, it would seem that they would be happy for you. A mortgage is too long-term and too expensive to make choices based on friendship.

Originally posted by @Wayne Brooks:

How far along, exactly, are you?  If you have 30 days or so, or if the seller will agree to an extension, go ahead.  But first, confirm what you think you found, then tell your current mtg broker, he may can do better.

 We are one week into escrow. Closing scheduled for Nov 5th. Once I get a Good Faith Estimate from the new loan officer, I will see if my original broker can do better.

Originally posted by @Simon Campbell:

 A mortgage is too long-term and too expensive to make choices based on friendship.

This is my feeling as well. At the same time, I want to be professional here. I do not know how much time on the back end that he has put in and I also do not want to burn a bridge in this small city with someone who I might need to work with in the future. 

In my experience, real estate agents are simply looking to help out their buyers. They provide a short list of some area lenders, contractors, etc that they have worked with in the past and were pleased with their experience. They provide this information, not to push the buyer to use them, but only to point them in a direction. As long as your agent is a professional and experienced, he or she will not mind one bit... as long as you close and they get their sales commission. 

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