I’m currently representing a seller in a transaction and being pressured by the selling agent and the mortgage company to have my seller close sooner than was agreed upon in the purchase agreement. It started with an email that said something to the effect of do your clients want to close early?
Lock shorter than closing window?
Of course, my client doesn’t want to move up the closing, nor is he required to do so because the purchase agreement dictates when these kinds of things occur.
I called one of my good friends who is a mortgage banker to get his take on the situation. He indicated it was a mistake for the lender to agree to lock a loan for a specific period of time that is shorter than the closing window, and that typically it can be addressed by paying a lock rate extension fee of a quarter point.
The house in question is about $300k, so this fee would be about $750.00. The lock was granted prior to the 2016 election of Donald Trump, and rates took a bit of a jump post election, so it’s easy to understand why the lender doesn’t want to try to honor the rate it had quoted before.
Solutions for compromise
My seller said he was willing to accommodate the request with a couple of week lease back so he can stay on schedule as far as locating other housing and moving all of his stuff. The buyer wasn’t thrilled, and hasn’t determined what course of action they might be willing to take outside of closing early. I’ll keep you posted as to what occurs.