Cash Out Mortgage Refinance

by Tish
(Albany, NY)

Ask Kate about Cash Out Mortgage Refinance Rate Lock Problems: Hi Kate, I closed on my refinance last Tuesday and was advised by the lawyer (I live in NY) that I could pick up my check (I had cash-out) within a week.

Tish continues... I called a week later, and was advised by someone else at the law firm that the mortgage company is requesting an additional fee for a rate lock extension fee (which I was never advised of).

I've signed all the paperwork and have agreed to all of the terms in the original closing, so can the lender now change their minds and ask for additional money?

I should add that despite excellent credit scores (800's), and a low debt-to-income ratio, the refinance process has taken 7 months from start to finish. My mortgage lender states this is because I had unfinished construction that the underwriter's required me to finish prior to closing. The work, in reality, took 2 of the 7 months to complete. For some reason, they applied for an FHA loan, which I believe has certain "safety" restrictions for lending.

I've begun writing a letter to the VP for Lending, and am hoping for a resolution that will be swift. I refuse to pay any additional fees for extensions that were out of my control when I fulfilled every aspect of my obligation during this process.

Any insight you can provide will be greatly appreciated!!

Kate Answers: Cash Out Mortgage Refinance Rate Lock Problems

Ask Kate at
Dear Tish,

I was going to give you an uncharacteristically short answer, "Go for it!"

But meanwhile thought of a couple of questions that might help you organize your thoughts even more.

1- Did you sign a mortgage rate lock agreement? If so, what were the terms of the lock?

Tip: How good is a mortgage interest rate lock guarantee? In the end, you have to read your lender's paperwork.

2- Were you notified in writing of extension fees when you locked your interest rate?

Tip: Your rate lock is meaningless if you don't get mortgage broker fees in writing.

3- When the mortgage rate expiration occurred, under what terms was the new rate locked or extended? Were you given the details in writing?

Tip: Ask the right questions to avoid hidden fees before you lock mortgage rates.

4- What was the specific reason the cash out mortgage refinance went past the rate lock date?

Tip: My Interest Rate Lock Guarantee - Help for timing your rate lock.

Closing The Cash Out Mortgage Refinance

I think you are smart to go straight to the mortgage company to investigate. Although not often, I have seen escrows (or in your case a closing attorney) overlook collecting certain fees. This may or may not have happened here. But you have a better chance of finding out by going directly to the lender for answers.

So in closing (argh, another one of my unintended puns), be detailed and as objective as you can. Supplement your letter with copies of written agreements.

Keep in mind whenever mortgage rates increase, involved parties become tense. So don't be surprised it you witness emotions riding high.

Tish, one more thing. I'd like to hear back from you. Let me know if this page was helpful to you and please will you let me know how this turns out. Comment here on Cash Out Mortgage Refinance.

Or Ask Kate another question here.

Best Wishes,

Ask Kate

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