Locked into mortgage?

Question

I recently purchased a home. I am now going through all the steps before closing... inspections, insurance, mortgage, etc. I had a mortgage pre-approval from a particular bank. I ended up applying for their mortgage. I was just informed that my application has been accepted.

However, I just came across Bank of America's "No Fee Mortgage Plus" deal where they waive the application fee, closing costs, and PMI.

Am I stuck with the mortgage from the 1st bank since I already applied and have been approved? Or is it until my settlement date that I am officially tied in?

Answer 1

Knowing what to look for puts you in a better position to decide whether, when, and how long to lock in mortgage terms. Also, by helping to keep the loan process moving, you can lessen the chance that your lock-in will run out before settlement.

But what if your lock-in does lapse? If you believe that the lapse was due to delays caused by the lender or someone else involved in the loan process, you should try first to reach a mutually satisfactory agree­ment with the lender. If that effort fails, con­sider writing to the appropriate state or fed­eral regulatory agency.

Some lender actions, such as offering lock-­in terms which are impossible to fulfill, fail­ing to process your loan diligently, or caus­ing your lock-in to expire are improper-and may even be illegal. In addition, because you may have contractual rights under your lock-­in or loan commitment, you may want to consult with an attorney. Be aware, though, that complaints may not be resolved as quickly as may be necessary for a home purchase.

Depending upon their authority under applicable state or federal law, regulatory agencies may either attempt to help you resolve your complaint directly or record your complaint and recommend other action.  

Answer 2

Under most state laws, you are not obligated to complete the transaction merely because you have received information and/or have signed an application. Basically, you are under no obligations until you sign your final Loan Documents at closing.

I would not, however, cancel this loan until you are approved with Bank of America.

Good luck!!!