This was taken from a higher activity sub, and I wanted to give some advice with some of the points and questions.

Here's the summary:

The buyer switched to a different lender shortly before closing because the costs and guarantees were clearly better, even though their realtor-recommended lender had been very helpful throughout the process.

They feel guilty about changing lenders after weeks of work and are seeking reassurance that this is a normal, reasonable decision.

I am 23 years old and in the process of buying my first home. My realtor has recommended a lender to me who has been excellent to me and has been incredibly helpful.

Knowing that this buyer will switch makes this statement a little sad. "This is a great loan officer, excellent and helpful"

I was initially going to use a 10k loan offered by my state's government for down payment assistance, but I have changed my mind and just decided to do a lower down payment since I am locked into a higher rate with this assistance. I wasn't aware of this at the time I compared with another lender for rates.

When dealing with down payment assistance programs, shopping for the best interest rate is harder because most local down payment assistance programs have a list of approved lenders, and the rates/closing costs could be dictated by the program's rules rather than the lender.

Anyway, since then I have changed my mind and both lenders recalculated the closing cost for me and the bank my realtor recommended is asking for $2k more in closing cost that I didn't notice at the time comparing estimates since I was using different down payment percentages between both banks at the time.

I brought this up with the loan officer and he said that these will be much closer when they get the final numbers, and that there are some spots the other bank is underestimated, but even without this they are charging me over $1000 more just in origination fees and a difference in less than $100 in estimated taxes and mortgage payments.

When comparing loan offers, here are some sound rules to follow to make sure you're comparing it correctly:

Same rate (yes, see if the first lender can set the rate equal to the other lender)

Same product (FHA, Conventional, USDA, VA)

Same term (30 years, 15 years, 10 years)

Same format (not a quote sheet, but an official Loan Estimate)

Once you have these things matching, then look at page 2 of your official Loan Estimate. On page 2, compare sections A, B and J.

Whoever has the best total has the best offer.

They did however underestimate the title potentially by a couple hundred dollars as well. The other bank has guaranteed that they can meet my closing date coming up in a couple of weeks, and not only that but they would also pay for a second appraisal if for whatever reason they can't transfer it over.

Anyway, the loan officer works out of the city I am buying a house in, was recommended by my realtor who I really like, and has been really great to me throughout the whole process. I wanted to call today but he had kind of a busy day and didn't have a chance to call back, so I made a gut decision and told the other lender I was going to go with them. I'm somebody who has a really difficult time saying no and delivering bad news. I know that I am absolutely making the right decision but I'm dreading this phone call tomorrow and feel extremely guilty that they have worked with me for about a month now just for me to change lenders after spending all of this time and collecting all of the needed documents.

These guilty feelings are probably coming out because this person was never up front with either lender.

If the buyer had started the conversation with his intentions, then he'd feel less guilty. Try something like this:

"I'm pretty deep in with this lender, but I'd like to use you as a competing Loan Estimate to see if he'll match or beat your offer. If he can't, I'd like to work with you. If he can match, then I'll proceed with him"

If you open with something like this, and the lender agrees to it, you'll avoid feeling awkward.

I guess I don't really know what I'm asking for here, just reassurance to not feel bad and if anybody else has made a decision like this weeks before closing after working with a lender for a while.

The lender you shafted after weeks of work will cry his commission's worth of crying, then wipe his tears and move onto the next. In a few days he'll have forgotten about it. So I wouldn't feel bad for saving yourself a few thousand.

Two pieces of advice for those who are planning to negotiate for a good deal: be upfront with everyone. and learn how to compare offers.

Here's a post on how I'd go about it.

Good luck out there!

Sam