We built a new house which was completed and ready to move into May. We had no problem getting a construction loan and the lakeside property was paid for, in full. Having excellent credit, we shopped for the best interest rate to transfer the construction loan to a permanent home loan.
Countrywide had. 5% better rates than their competitors so we started the process. They confirmed the appraisal was fine, our credit was great. They would be happy to loan us $340k.
Then, at the eleventh hour, the night before time to close the loan, they decided that we could not qualify for the full amount of the loan. However, if we wanted to take out two loans with them, a first and a second, they would make the loan.
This added a few more days before closing and we were very nervous about the deadline for paying off the construction loan. They assured us that the first would only be. 5% higher than they had originally promised and the second would be only 1% higher, with a 30 day promotion rate of only 3%.
We agreed to their terms as we didn't have much time before the deadline and although we had to pay quite a bit more for two closings, we signed the deal.
It wasn't until 40 days later that the interest rate jumped 4 times on the second. Their explanation was that because the 40k second was in the form of an equity loan, they were not obliged to disclose the actual interest rate prior to closing.
We would very much like to know how a California Corporation can get away such practices.
0 comments