Can I rescind Loan refi?

Question

Hi everyone! Need some advice. I was working on a refi of our primary residence and now thinking of backing out but not sure if I can legally. I would think its possible but I don't want the lender to bluff me with fees and penalties to stay if I can legally walk. Basically we signed approx the 30'ish pages that say this will be your rate, %, term and payment etc. We haven't made it to closing nor has any money changed hands. Its been in the works for 5-6 wks now, prob delayed due to covid, but just today we received a better offer at 2.49%. The company Im thinking of walking away from is offering 2.75% (my current rate 3.25%). TIA!

George Lods · Answer

@Moises R Cosme thanks and I did end up having a convo w/ the first mortg agent and he wasn't defensive as I had feared. He simply stated he would match whatever the second offer proposed. Which leads into the point @Wayne Brooks brought up which is fees. The 2.49% came with an additional cost of $2500 at close and in doing the math, the lower rate would save me  a whopping $17.29 a month lol. That would take me about 12 yrs to recover that 2500. Heck I can make way more than 17 bucks in just 5 min doing day trading with that same 2500! Thanks for the response guys!

Moises R Cosme · Answer

George, I am glad you got this resolved; the mortgage process is super stressful, its a wonder that someone has not come up with a better solution.

George Lods · Answer

@Lien Vuong thanks and I totally agree. I believe I will be staying with the first lender for the mere sake of not having to start all of the paperwork over again!

Lien Vuong · Answer

What you signed is likely a disclosure, you will have to eat some of the loan cost but I think there's a possibility you would be able to walk away. Both rates are strong and I think it's marginal that you wouldn't really see a huge difference and start with an entirely new process again.

Wayne Brooks · Answer

@George Lods Make sure all the fees for the 2.49 one are in line with ithisone....it’s easy to wipe out a .25% difference.

Moises R Cosme · Answer

Have you signed the closing disclosure?  With any refinance you should have a 3 day right to rescind, that 3 days is typically based on signing the closing disclosure.  You should not be afraid to ask your lender, if you want to walk because you can get a better deal I would encourage you to be as direct as possible (this is what I would do if I were you).

Can I rescind Loan refi?

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