Bank offers a match rate after getting approval from another bank

I have a question to all mortgage brokers here. How do you feel if you are in the following situation?

You have done all your hard works to get refinance approval for your client. The refinance has been approved. Your client is so happy with your service. However, it is just about the the point when the lender issues the letter of offer, the bank which your client currently has mortgage drags down your client and offers a match rate to keep this client. Your client decided to not refinance any more to save the discharge and application fees.

Any one in this situation?

 

Happens often. This is why it is good to charge a fee in these situations. Some clients even offer to pay as you have saved them money.

Ask your bank if they could lower rate again.

And suggest to your client that their existing bank hasn't been helping them out until they are about to lose you and then they are playing the nice guy - like a husband beating a wife and he agrees to stop only when she is going to leave.

 

Propertyinsight are you the borrower or the broker?

 

I have the chat to my clients that they will get calls from the bank to convince them to stay. And to politely say thank you but they are taking their business elsewhere.

And also if the loan includes an increase that the bank may not be able to commit to retain them if the client's situation has changed or bank policy has changed. It's the rention team's job to get you to stay. They have no idea whether you can actually service the new loan. So you could be doing yourself a disservice by cancelling the refinance and missing out with both lenders.

 

It's very annoying that lenders won't offer existing clients a better deal until they're literally walking out the door. It's frustrating for brokers especially as it takes quite a bit of time and very real money to get a loan approved. If it doesn't proceed we don't get paid.

Many brokers charge a fee if they've obtained an unconditional approval for a borrower but it doesn't proceed. I've never done this myself, but I have been tempted to.

I prefer to try to negotiate with the original lender first. If that fails, then refinance.

 

Thanks for reply. This is very tricky situation. Appreciate your sharing.

 

I do charge a fee when a loan has been approved but doesn't proceed, unless I'm at fault of course. I've never had to charge it though.

Talk to your broker - if it's to save the discharge fee, they may cover it. There can be a win/win in there

 

I always try to reprice the customer with their existing lender before submitting a loan application and show the clients the result. If it is only when the client wants to discharge the existing lender matches, I just tell the client if they wanted your business they should have matched earlier and they should take their business elsewhere and I have never had any issues with the client wanting to stay at their existing bank. As brokers we generally know what the other banks can offer prior to recommending them to refinance.

 

As a borrower, if my bank has been given the chance to provide me with the best deal and they have gone so far as to make me go elsewhere, they have lost my business. There is no coming back after the fact and suddenly finding me a better/match rate.