Refinancing My Mortgage

by KS from Tampa, Florida USA

Ask Kate: Refinancing My Mortgage - I want to lock mortgage rates at more than one bank. Now what?
Hi Kate, I came across your website while googling on refinance. Your website is very informative. Wonder if you could advise me on refinancing my mortgage.



I have a current mortgage with Bank #1. I applied to refinance with Bank #2 taking advantage of low interest rates.

They took the preliminary application over the phone and told me the rate is locked at 4.5% with funds at closing $2500, which would be rolled into the loan. Today I received paperwork from Bank #2 stating the rate is 4.5% but funds at closing would be $4900.

The mortgage application further states Bank #2 requires the signed documents by 3 days and "if your interest rate expires, you may not apply for a new interest rate until 90 days after your current rate lock expires".

I am a little confused as to what this means. Am I bound to Bank #2 now? Do I have to absolutely submit the signed mortgage application to them? What if I did not?

Bank #1 has just made me an offer of 4.25% with funds at closing $4000. Can I lock the rate with Bank #1 instead? I would rather proceed with them now.

Wonder if you can throw some light on refinancing my mortgage. Regards, KS

Kate Answers: Refinancing My Mortgage - I want to lock mortgage rates at more than one bank. Now what?

Hi KS, Simple question, complex answer. Bank #2 may not be as bad as you think.

For example, the discrepancy in closing costs needs an analytical eye. But before I continue, please understand as I don't have Bank #2's documents in front of me, I am going off generalities. So I will pose questions with the hope that you can find answers in their paperwork. OK, let's break it down.

Does the difference between $2500 and $4900 come from non-recurring or recurring closing costs? If the increase is due to property taxes, homeowners insurance and prepaid interest, will you receive a refund of existing tax and insurance accounts and/or a month or so without a house payment offsetting the $2400 difference?

Learn how to understand a good faith estimate at Mortgage Closing Costs for best refinancing results.

Did you deposit initial funds with Bank #2 in order to apply or lock your mortgage rate? You will want to ask under what circumstances a deposit is refundable upon cancellation of a mortgage application.

Did Bank #2 order your credit report? If you reapply with Bank #1, keep in mind additional credit inquiries could have a detrimental affect on your scores.

Read that document again, the one that says, "if your interest rate expires, you may not apply for a new interest rate until 90 days after your current rate lock expires". I'm pretty sure you will find it refers to locking another rate at Bank #2.

However if both banks are connected in any manner, having locked at Bank #2 could hamper your attempts at a better rate and closing costs through Bank #1.

All mortgage transactions, over the phone, via the internet, face to face must be in writing. I understand the challenges associated with this. Go to How To Lock Mortgage Rates And Avoid Hidden Fees for a solution.

Follow the links down below leading to an in-depth look at refinance, closing costs, mortgage rate lock and other turbo tips.

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KS, please come back and visit often. Help me spread the word by sharing my website with your friends. Remember, all of my information is free!

Best Wishes,

Refinancing My Mortgage, Closing Costs, and Mortgage Rate Lock Information

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