Mortgage question, our broker screwed us around....?
My husband and I bought a house and we take posession before the deal on our house closes. There is a week inbetween and we were told we needed interm financing or a bridge mortgage to make up the different between the sale of our house and the posession of our new house. The mortage company made a huge mistake and didn't calculate our bridge financing into our mortgage and because it was left to the last minute, we had to literally put together $17,000 in a matter of 4 hours or we risked loosing our new house and the $25,000 deposit we put on it. Because we didn't have the money (who DOES after just buying a $461,000 house?) we had to borrow from our line of creit and even had to ask my mom for money. Now we are $17,000 in the hole. My question is how much does it cost to re-finance a mortage and what is the penalty for that? Is there any way we can take that $17,000 out of our mortgage so we can pay everyone back?
Also, we are Canadian, not American.
- Anonymous1 decade agoFavorite Answer
Your situation raises a number of issues. First, a bridge loan is a temporary loan designed to allow someone to complete the purchase of a new home, pending the closing of the sale of their existing home. Typically the payments in a bridge loan are deferred during the interim. This is the benefit of a bridge loan, i.e., the borrower doesn't have to make 2 mortgage payments. Once the existing home closes, and the borrower pays off the mortgage, the deferred interest on the bridge loan is added to the principal balance of the new mortgage.
It is not clear why you would need to come up with $17,000 to close at the last minute. As one of your other respondant's mentioned, the place to start if you are considering your options, is with the original loan documents. I am not familiar with Canadian laws, but in the US, lenders must provide a truth-in-lending disclosure and a good faith estimate of closing costs at the time of application. These are intended to inform the borrower about the cost of the credit they are receiving, and estimate the amount of cash the borrower will need to close. What was the amount of cash which was originally needed for closing? Was it close to the $17,000 figure?
If the numbers weren't even close, the lender may have violated the law regarding disclosure of these costs. You may have grounds to sue to recover your damages. I would suggest you contact an attorney to discuss what options are available to you.Source(s): I am a real estate attorney.
- ?Lv 44 years ago
The best thing you can do for yourself is ask questions of things you are not sure of. Even if these questions appear to be of little importance to you they might save you money in the long run. Failure on your part to understand certain features of your loan might cause you problems in the future. Remember that once you sign your loan docs you are now a home owner with a monthly mortgage due each and every month. After signing loan docs it is too late to say I did not know what I was signing and did not understand the docs I signed. You should be given 2 documents after signing your loan application. One is a Good Faith Estimate (GFE), the other is a Truth In Lending (TIL) one form will tell you the cost of this mortgage loan, the interest rate and other things mentioned below. The other document will tell you about the same but you will find that it has additional information. You might also request a preliminary HUD-1 from your escrow, after escrow has been opened. Prior to signing anything have your mortgage consultant go over the program that you have been approved for. This should include your interest rate, if this is an adjustable or fixed rate mortgage, your monthly mortgage payments and the number of years your mortgage will be for. Once this is explained to you these same terms and information should be on your loan docs. From what you have stated he is doing a fairly good job,paying all closing cost, getting you a 95% mortgage therefore you are only putting 5% down on the house you are planning to purchase. With him paying all closing cost you might inquire if this covers your first year of hazard (fire) insurance and current year taxes? I hope this has been of some use to you, good luck. "FIGHT ON"
- earth angelLv 41 decade ago
What you're doing now is right (in a way) that is if you could get a fitting answer from public all over nation. Different states have different law...., if I were you, i would talk to the bank where my mortgage is being handled and get their opinion, but before i consumate their solution, I would talk to other bank and see what they can offer to solve the problem. There are so many lenders around these days, so i will go to them and ask some more. If in 5 answer, 3 are the same, then I would go ahead and see what those 3 would do to me.
You can always tell them where you're coming from and that you needed help truthfully, they are also human being and would love your business because that's how they make money. just be careful and study each contracts very well before signing up. and relax.
- 1 decade ago
looking into your situation depending how much your ltv is i would not touch the first mortgage if there is a prepayment penalty involved would take a second mortgage would be at higher rate but would be cheaper than your line of credit
or credit card you can refinance upto 95% of your house value if credit is fine incase you have a open mortgage in canada then discuss it with the current lender only.
they will be able to accomodate your request for additional financingSource(s): salim bhimani TMACC email@example.com
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- healthspot_2000Lv 41 decade ago
I would be glad to help you out with this. It wouldn't cost you anything upfront with the refinance, because it's all built into the loan. There is no penalty for refinancing, unless you have a prepayment penalty on the loan. You can do a "cash-out refinance" on your home to pay the money back.Source(s): If you need any more assistance, please let me know via e-mail. I am a loan officer in Georgia but that doesn't mean that I wouldn't be able to answer your question if you are in another state.
- 1 decade ago
That a second look at the GFE, make sure that he did not add any more fees.