Sometimes we don’t realize what exactly is involved with a deal until after we’ve signed for it. Refinancing can be like that in many ways. You may do all your homework and research, think you’re getting the best deal possible or refinancing at the lowest rate, only to discover soon after signing for the new loan, that a better deal is now available, or you were part of a scam. Although this will hopefully never happen to you, there are things you can do if it does.
If you find out right away that refinancing was a bad idea, or if you discover you are not refinancing at the lowest rate, you do have a three-day grace period from when the papers were signed. Aside from the processing fees and other random costs, you will be entitled to cancel whatever deal was made without further consequences. There might also be a cancellation fee to cover the termination of the loan application, but this varies from lender to lender. Many people who are trying to pull refinancing scams will try and fast talk you into signing a deal, only to have you realize afterward that you were taken advantage of. The lender has to allow you to terminate the deal under the law. If they refuse to comply, you have the right to sue them.
The lender also has no legal right to alter the details of a deal after the papers have been signed. As with any other contract, it has to be completely fulfilled by both parties. If your lender tries to change a detail of your refinance after it has implemented, you have every right to tell them what they’re doing is illegal, and you will be willing to solve the problem in court if necessary.
Should you decide after the three-day period that it was not the right time to refinance, you face a much more challenging dilemma. Since you are in a contract to pay off the new mortgage, it is what you’ll have to do for the time being. After paying the current refinance rate for a while, you can look into refinancing the loan again and hopefully refinancing at the lowest rate. This is by far the least desirable option since the original goal of the first refinance was to secure a better deal. You will then have to undergo the entire refinancing process from the beginning, in hopes of being able to get a better refinance rate and save more money.
Ideally, you will not have to worry about doing any of the above since you will get the best refinancing rate and overall refinance deal possible. Problems do arise however, and sometimes all the research and care in the world cannot prevent certain conflicts and errors from occurring. If this does happen to you, make sure you are aware of the details of your agreement, as well as what your rights are as a borrower. Do not let yourself be talked into taking a deal that is less than what you wanted, and if something doesn’t seem clear, ask. It is up to you to make sure that your refinancing process goes smoothly and that you know every last detail of your deal.