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Can a Bank change intrest on loan after papers are signed?

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NancyZ

Junior Member
What is the name of your state? New York

My husband and I signed the papers for a second mortgage 4 days ago. The 3 day cooling off period was over yesterday. The interest rate quoted and put on the papers (3 times in fact) is 5.95%. Today I get a call from the bank that the closer made a "mistake" and the rate is really 6.20%. The 5.95% was if you signed up for direct debit, and we did not sign up for that, we wanted a mailed statement. Now we signed papers for the 5.95, and they have now put the money into our account- so to me it is a done deal. Can they change the terms after the fact and charge a higher interst rate? What can I do now?
 


Veronica1228

Senior Member
NancyZ said:
What is the name of your state? New York

My husband and I signed the papers for a second mortgage 4 days ago. The 3 day cooling off period was over yesterday. The interest rate quoted and put on the papers (3 times in fact) is 5.95%. Today I get a call from the bank that the closer made a "mistake" and the rate is really 6.20%. The 5.95% was if you signed up for direct debit, and we did not sign up for that, we wanted a mailed statement. Now we signed papers for the 5.95, and they have now put the money into our account- so to me it is a done deal. Can they change the terms after the fact and charge a higher interst rate? What can I do now?
If they know what they are doing they will draw up new loan docs with the correct rate and have you sign them. Don't forget that they reserve the right to call in the loan at any time, so one way or another you are either going to give them the money back or sign the new docs with the higher rate.
 

efflandt

Senior Member
Read your loan papers. The ones for my fixed rate loan (a 1st lien replacing a mortgage in my case) detail that if you do not set up Auto Pay, or discontinue Auto Pay at any time, the interest rate is 0.25% higher. Unless the lender is clueless, that is likely somewhere in the fine print.

It costs them more to send you payment books and process checks.
 

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