Lender adding points late in the game!

[Garrett M.]

Has this happened to you? I’m very late in the game on multiple refinance loans and the lender keeps increasing the closing costs through increased points.

Now there’s about $10k in closing costs that were not on the initial estimates.

I feel like I’m getting kicked around by the lender. Your Best and quickest advice is appreciated.

The original estimates had reasonable point costs like around .625 of a point, now very late in the process they are at 2.75 points. I have excellent credit and nothing on my end has changed.

Aren’t those Good Faith Estimates supposed to be honored?

What’s the best way to push back? Or do I walk away?

[Chris Mason]

Originally posted by @Garrett M.:

Has this happened to you? I’m very late in the game on multiple refinance loans and the lender keeps increasing the closing costs through increased points.

Now there’s about $10k in closing costs that were not on the initial estimates.

I feel like I’m getting kicked around by the lender. Your Best and quickest advice is appreciated.

The original estimates had reasonable point costs like around .625 of a point, now very late in the process they are at 2.75 points. I have excellent credit and nothing on my end has changed.

Aren’t those Good Faith Estimates supposed to be honored?

What’s the best way to push back? Or do I walk away?

Might be a coincidence, but 2.125 is exactly (to the penny) the adjustment that would be incurred if it was originated as owner occupied, and the underwriter had reason to believe it was actually a rental property. 

Whatever caused it, it's against the law for the loan originator to get any of that difference. So it's fairly unlikely that your LO intentionally engineered it, and trust me I know that it's NOT a fun conversation to have for the loan originator either. What does that person say is going on? 

Do they do a lot of investment property financing? --> the reason I ask: <-- It's fairly common for me to see a competitor's "quote" beat mine by 1.125 or 1.7 or so for the same rate, which is my ballpark starting pricing advantage minus the 2.125 that I'm hitting them with that the other person isn't, then I have to tell the consumer it's going to be "adjusted" by underwriting at the 11th hour, incompetence is more likely than malicious intent but that's how it's going to play out either way, and it's a total coin toss if the consumer believes me upfront or needs to learn the hard way (either way, I may or may not get this transaction, but I will get the next one, so I'm fine with either outcome tbh).