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When I sign the mortgage loan document, if I see the numbers or the interest rate in the document are not as promised by the loan officer, do I have the authority to refuse signing or back out? If so, will the loan officer ask me to pay for all the work they have done and the charges they paid for the appraisal and etc?

Thanks!

11 Thoughts on Can I refuse or back out of signing mortgage loan doc?
  1. Reply
    Liz
    June 28, 2012 at 3:37 am

    You should have paid for your own appraisal… and if the promise you a certain rate, payment, ect and do not follow through with those promises you absolutly have the right not to sign. That is actually against the law, called bait and switch. Anything they promised you should be put int writing before you get to a singing stage.

  2. Reply
    jim
    June 28, 2012 at 4:24 am

    Yes. Even if you sign it, you have 3 business days to cancel the contract for any reason. It’s the law.

  3. Reply
    larry r
    June 28, 2012 at 4:27 am

    In the case of refinancing your primary residence, you have a 3 day right of recision period where you can cancel the loan if you are not satisfied or for basically any reason. However, the lender will most likely require payment for the appraisal and credit report at a minimum. In addition, the title company will want to be paid for their work in obtaining a title committment, etc. If the loan was not on your primary residence there is no right of recision period. The same is true on a loan used to purchase any property. If you feel the lender mislead you or did not disclose the rate and terms and estimated closing costs, you may have the right to take action against them or at the very least, ask them to “eat” the fees they incurred in getting the loan approved.

  4. Reply
    Wendy Jean
    June 28, 2012 at 5:09 am

    You have the right to back out, even after you sign it. Some places give you 3-5 days to back out after signing it. That is why it is important to read everything they want you to sign.

  5. Reply
    jc
    June 28, 2012 at 5:57 am

    after u sign it, u can back out until midnight of the third day after u signed the papers

  6. Reply
    open4one
    June 28, 2012 at 6:33 am

    If you couldn’t back out at any moment up to the signing, there’d be no point in signing. Yes, you can back out, even if the rates are precisely what they promised.

    They cannot force you to pay anything you didn’t pay up front. Usually they do make you pay for the appraisal, but the rest of it, no.

    You could even force them to refund that if they do not keep an ENFORCEABLE promise. What that means is that there is a difference between “I think your rate will be X” and having a documented “rate lock for X”. Other terms you can back out from and not pay for are if you made it clear from the start you wanted a fixed rate, and the note at the closing table is for a variable rate (not to say all variables are bad, just different from fixed).

    Be sure you are looking at the right thing on the interest rate. Understand that the rate on the Truth In Lending is going to be higher than the one in the Note, and be sure they explain why. You could be promised 6%, get 6% in the note, but the TIL might say 6.5% and that’s okay. Just be sure it’s clear to you why.

    edit: the three day right to cancel only applies to SOME transactions. It must be for a residence that you already own. It doesn’t apply to commercial transactions or purchases.

  7. Reply
    Lotus Phoenix
    June 28, 2012 at 6:36 am

    There should have been an initial agreement which states the amount you’re to get and the terms (interest rate wise). Once you have that and it is different on the actual mortgage, refuse and say this doesn’t have the deal I was guarenteed to agreed to.

    You can even switch banks if they add on an extra charge. A client of ours had to do that.

  8. Reply
    mikegs400
    June 28, 2012 at 6:49 am

    Don’t sign it. Your interest rates are still negotiable. If you are not satisfy with the loan …say no. No, you don’t have to pay for his work on the loan…..its part of his job. Demand a better interest rate…..they were suppose to give you a “Good Faith Estimate.”……which tells you ahead of time all the costs of the loan….including interest rate…..PS…don’t get an ARM loan.(adjustable interest rate)………this is why you hear about all those foreclosures.

  9. Reply
    MLaw
    June 28, 2012 at 7:17 am

    The 3 day rescission period applies only to re-financing mortgages. Purchase money mortgages have no rescission period.

    You can always refuse to sign. The question is what penalties, if any you will suffer. You should have received a “Good Faith Estimate” of charges and a commitment letter containing the mortgage terms, from the mortgage lender. If the terms differ from the commitment or the actual mortgage charges differ significantly from the GFE you can walk out without penalty paid to the lender other than payment for the credit report & appraisal. HOWEVER, if your purchase contract was not contingent on a mortgage or the mortgage terms were left open, you are not off the hook with the seller. Depending on the contract language you may not be released from your obligation to close & could then lose your deposit or be liable for other damages. This is why you should always talk to legal counsel or a real estate professional BEFORE signing contracts for the purchase of real estate.

  10. Reply
    ILoveKeyLimePie
    June 28, 2012 at 7:19 am

    If it is incorrect, REFUSE TO SIGN. The mortgage commitment terms MUST match your actual loan docs.

    Contact your loan officer immediately, and they will have the closer re-do the package and send the new closing package via e-mail to your settlement agent. Sometimes mistakes are made.

    But whatever you do … do NOT sign anything that is incorrect.

  11. Reply
    bianca
    June 28, 2012 at 7:39 am

    of course you can refuse to sign loan dock if you want to, but if this is a purchase transaction- you can loose your earnest money, if this is refinancing- by the law you have 3 business days to change your mind and cancel this transaction even you sign the documents on your closing ( this recession law apply if this is not your investment property). depends what agreement you sign with your loan officer , you have to pay for your appraisal report and you have to read your papers if they going to charge you for cancellation.

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