Short Version: Because [reasons], I am considering trying to get a mortgage from a brick & mortar bank where the lender pays all the fees (I still pay escrow). I would then quickly refinance the mortgage using an online lender whose rates are significantly better. Can I do this, or is there a reason this would backfire on me? The brick & mortar mortgage does not have any early repayment penalties.
Details: Trying to close on a house within the next 2 weeks. Been using a brick & mortar bank to close the lending side of things. On a whim, I decided to compare their rates to others since their rates seemed kind of high. I found out I can get >0.5% lower rates from an online lender versus the brick and mortar bank. I called the online lender (assuming it was a scam), and was surprised to learn how legit their operation was. They sent me an official quote that included their full fees, and the fees would be basically the same as the brick & mortar, but with a much lower rate. Unfortunately, they also informed me that there is no way they can close the loan in time due to my near closing date. I talked with my realtor about all this, and he suggested that the quote was real, but that using an online lender is a risk because they sometimes don't get the lending closed on time and there is no way to go to them physically if there are problems. Next, I tried to use the online quote to negotiate with my brick & mortar bank, but they rejected it saying they do not honor quotes from online lenders... Doing the math, my payment would be almost $100/month lower with the online lender (again, with equivalent closing cost fees) - which adds up quick over even just a few years in the house. So, my solution is this: Stick with the brick & mortar bank so I can close the loan in time, and then refinance the loan using an online lender to get the lower rate. So the fees from the first closing don't ruin my "profits," I would go with a higher rate from the brick & mortar lender in exchange for them paying all of my closing fees. This way, I would be free to swap the loan through refinance without having to factor in the fees of the first loan. It seems like there ought to be a reason why I can't do this, but I can't seem to find it. Any help? This is my first home purchase, so I feel a little lost.
Submitted August 13, 2017 at 09:50AM by mountainmover88 http://ift.tt/2vzbEas
