Q: I’m reading your article on refinancing. At the bottom of one column you say, “Once you’ve signed the application, you’ve sealed the deal.” Does that mean you still have to go through with the loan after you’ve done some research and found fees are too high? What if it is slightly different when it gets to the table?
A: I would hope that you would do your shopping around before you sign a loan application, because you’ll never know you got the best deal unless you’ve talked to other lenders about the loans, interest rates and programs they’re offering.
If you apply with a lender and then decide to apply with a different lender, you’ll probably lose whatever money you’ve paid to the first lender. In addition, you have to be careful because some lenders will charge you an additional penalty for canceling the loan application.
If, after closing on your refinance, you decide to cancel the deal, you generally will have a 3-day right of recession, which allows you to undo what was done, but you would still wind up losing whatever fees you’ve already paid to the lender.
However, if the lender changes the deal on you, you may have the right to sue the lender and recover the fees you paid to the lender and perhaps other damages as well.
While you should have thoroughly investigated rates, fees and points by the time you get to the closing table, sometimes deals look different on the day of closing.
If you’re at all concerned about the lender with whom you’re doing business, you’re far better off canceling the deal within the 3-day right of rescission than you are going through with the refinance and then starting the refinancing process all over again.
Dec. 3, 2003.
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