Low appraisal, falling rates. Should the lender offer new terms?

Q: I locked in a rate. The property appraisal came in low, so I negotiated a lower sales price. Now interest rates have fallen again. Can I cancel the lock-in, get a lower rate for the smaller loan amount? These seem like two separate transactions to me, but the mortgage lender disagrees.

A: There's no "law" when it comes to a lock in. You can ask the lender to consider lowering the interest rate for you; they are under no obligation to do so but may. Of course, there is always the "nuclear option" of canceling the entire deal, but that can be expensive and burdensome, especially if the property is a short-sale or foreclosed home. You will need to decide if the loss of any fees you have paid and the hassle of restarting the process all over again is worth any small reduction in interest rate you might get.

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)
Submitting your question...

Question received! Check back later to see if your
question gets published.

Q: Can I get forbearance for my mortgage?
MAR 18, 2020
A:

The answer is "possibly." It depends on the situation.

Read More
Q: Is mortgage insurance tax deductible?
JAN 08, 2020
A:

Tax deductibility for PMI premiums or MI premiums for FHA loans has been an on-again, off-again kind of thing. For 2019 and 2020, it's back on.

Read More
Q: How many times can I use my VA home loan?
OCT 31, 2019
A:

There are three ways you can restore your VA eligibility so that you can take advantage of it more than once.

Read More
Add to Homescreen?
X
X
Install this web app on your phone :tap and then Add to homescreen