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See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

See what's happening with home values in more than 400 metropolitan areas with HSH's Home Value Tracker, just updated though the second quarter of 2022.

Is this mortgage quote "bait and switch"?

Q: I was given a GFE for today at 3.25 percent with no costs apart from appraisal. When I submitted the loan application and told him I was ready to lock in, he said I would have to pay $1,700 extra dollars because rates changed midday. Can they do this? Is this bait and switch?

A: Interest rates can and do change frequently, and there can be a jump in costs from one day to the next. In your case, and with the limited information provided, it is hard to tell what the situation is--it might as little as a quarter-point fee on a $680,000 loan -- which would be just a slight wobble in price over a day's time. Also, it appears that you got a Loan Estimate (LE form) before you actually submitted the application; if this is the case it would not be binding in any way. It's possible that there are add-on fees from Fannie Mae or Freddie Mac (determined by the intersection of your credit score and loan-to-value ratio) which may come into play, too. If you aren't satisfied with the quote, you can always cancel the deal, and all you would lose would be any non-refundable fee (possibly a few hundred dollars).

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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For the most part, this is a discussion about time. You should compare the total costs of the difference in the two interest rates over your given time horizon.

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