In qualifying for a mortgage, it is hard enough the stress a borrower would go through to get the best mortgage rate suitable for him or her. But many at times, due to certain circumstances, situations or occasions, you might want to cancel the mortgage loans that you applied for. And in doing that, there are procedures that are followed to be able to cancel a mortgage loan.
There are different reasons why a person would want to cancel a mortgage loan and these reasons could include unfavourable mortgage rate trends. For example, a person who decides that the best mortgage type that will be more beneficial to him or her is the adjustable rate mortgage but some mortgage rate trends may cause the interest rates on mortgages which is the interest cost paid on a particular mortgage to increase to a very high extent, higher than the initial interest rate when applying for the mortgage.
So, it is very much possible to terminate your mortgage application even if you have already signed it and sent in all the papers and documents required by the lenders. The law also gives you the right to cancel a mortgage or home loan but in doing so, actions must be taken fast or swiftly and following the rules to the letter is a must thing to do. The borrower has a power called the “right of rescission” which gives the borrower privileges to be able to cancel their loan deals within three days. Right of rescission was designed to ensure that the lenders provided accurate disclosures and consumers didn’t sign up for a loan that is different from what are described in them. The right of rescission covers loans from banks, a mortgage company where applications for mortgages are made and other lenders. But, in some cases depending on the lender, you may lose application fees and may even pay penalty fees and it is agreed by the lender and the borrower what it would cost to cancel your mortgage application.
But, the generally, a mortgage applicant can cancel at any time before the loan closing. There are certain steps taken to start up a procedure of cancelling a mortgage. These steps are:
1. Speak to a lender representative of a mortgage company or you immediately reach out to your mortgage broker. Then after doing that, your broker may answer questions you may have on how to successfully cancel the mortgage and then get the name of the person who accepts your notice of cancellation and record every necessary information.
2. Write a letter and send the cancellation letter to the lender using a certified mail and leave a line open for communications so that you may be able to resolve any issue that could cause problems that could alter the cancellation process.
3. Send the cancellation letter to the representative and included in the letter is your loan application number, your name, address, social security number and your signature on the letter.
4. Pay any debt that is owed depending on the extent of how far the loan process was before cancelling.
5. After the lender has agreed terms and conditions with the cancellation process, you may be required to fill forms that are related to the cancellation process by the lender. Fill and return all forms and make copies of the paperwork you return to the lender for your reference.
6. Lastly, contact the representative of the Mortgage Company or mortgage broker or lender and send a letter to confirm the applicant’s cancellation.
Following these steps guarantees cancelling any mortgage application.