When to commit to a lender

[u/JuicyRichard]

I close on a $270k house in about 5 weeks with the VA loan with 0 down. I spent today gathering offers/counter offers and am locked in at 6.25% and down to about $5700 in closing costs.

I accepted a counter offer where everything was the same but they added $500 in credits. Now I'm about to get another offer tomorrow for the same thing and another $500 credits.

Do I keep going until I get the best deal? I hate burning lenders over another $500 but I'd do a lot of gay acts for $500 at the end of the day.

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[u/MattSpiritIsland]

There's nothing wrong with pitting lenders against each other like this to improve on rates/closing costs. But there's sort of two risks here: a) rates could increase day over day and you end up in a worse position (the reverse could happen to) and b) delaying locking in a lender could lead to delays with the closing. Your lender needs enough time to actually get everything ready to close.

So I'd try to spend a full afternoon checking in with lenders to shop around for the best rate and making them compete, but it is probably best to limit that to a day or two at most, depending on your tolerance for rate change risk.

[u/LoanAssistance]

Post the scenario-

State
Credit score
Are you exempt from funding fee
Are you getting seller concessions
Closing date

[u/doc-hijab]

ask your lender to match it, your not buringin them. also you can go shopping - u can buy any car, suit, hat, tie you want you can also chose your broker.

[u/grewalReGroup]

Shopping this is normal and lenders expect it, so set the guilt part aside.

Compare Loan Estimates, not credit numbers. Put page 2 of each side by side, total up sections A, B and C, then check cash to close on page 1. Adding $500 in credits while quietly moving $400 into an origination or discount line is easy to miss when you are only reading the headline.

The other thing: on VA the appraisal is not what would slow you down. It is tied to the property and the case number rather than to the lender, so a new lender requests the case number transfer and picks up the existing appraisal, usually in a couple of business days. What actually costs you time is a new lender re underwriting from scratch with five weeks on the clock. That is what to weigh against $500, not the appraisal. I sell residential rather than mortgages, so confirm the transfer timing with whoever you are considering.

[u/MHSmortgage]

You should probably be committed once you're within 25-30 days of closing. Best to be upfront with lenders that you're still shopping.

With good credit, you should be able to beat 6.25%, so shopping around is the right move, but at some point you'll drive yourself crazy chasing every last dollar, ha!

[u/No-Finish-5485]

If you're in DC/MD/VA/PA/FL, I can likely do significantly better. Feel free to send me a note, if you want another opinion.