Consumer complaint received 2025-06-16 00:00:00
Product: Mortgage — FHA mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — Changes in loan terms during the application process
Company: GUARANTEED RATE INC.
State: VA

Complaint narrative:
We were initially offered financing based on 3.5 % down and an interest rate between 6.2 % 6.9 %, with estimated closing costs of {$12000.00} and cash to close at {$35000.00}. Based on this, we felt confident moving forward and received this pre-approval to make an offer on a home. 

During the offer process, we asked our realtor whether we could offer 10 % down even though the pre-approval stated 3.5 %. We were told it didnt matter, so we chose to put 10 % down thinking it would strengthen our offer, assuming the lender would honor the same estimate. 

Unfortunately, thats not what happened. 

On XX/XX/XXXX, the lender unexpectedly informed us that we were no longer qualified under those terms and that they were proceeding to buy down the rate using discount points something we never requested or authorized. 

Later, the lender issued an updated estimate that included : Only {$20000.00} in down payment ( not 10 % ) Over {$42000.00} in closing costs Cash to close of {$57000.00}, plus our {$5000.00} earnest deposit Total required : {$62000.00} This was completely outside our expectations and what we agreed to. Even with these excessive costs, we were ultimately denied financing. 

On XX/XX/XXXX we were asked for our earnest money check but we were very concerned about these escalated costs, therefore, we kept pushing back and asking questions. The cash to close far exceed our expectations from the beginning. By waiving these flags to our lender and realtor, it seemed to have gone unnoticed and we felt pressured into moving forward on their terms, not ours. 

On this same day we made several calls with other lenders and those familiar with mortgage lending for advice if this was normal to be charged this many fees. We learned that FHA loans have more fees but again, we didn't feel comfortable moving forward with this as it deeply affected our financial picture for our household. We were worried, scared and concerned that we couldn't move forward. 

Our lender did not try to help, if anything they kept finding ways -- it seemed -- to get us a loan no matter what, except at our costs. 

We received an email from the lender on Monday, XX/XX/XXXX that said, " Based on the information you provided, your current debt to income ration is higher than the maximum allowed for an FHA loan. I have attached an updated estimate with you paying two points to get the interest down to 5.875 %. Doing this gets your debt to income ration back down and makes your loan approvable again. '' This email here states that we were denied. We couldn't make the financing work. Given that this offer fell under a financial contingency, why weren't we given a denial letter? Instead, the lender proceeded without our consent, sending final closing cost disclosures with the closing costs jumped from {$12000.00} to {$42000.00}.

It doesn't take a mathematician to see this is quite more -- and would in fact, hurt the bottom line. Our intention was to buy a home that was within our budget. We pushed back on this and in return our integrity was questioned and our relator suggested we get an attorney because the specified financing that was in the contract stated 10 % down. This is what we had intended, of course, but due to all the fees that were presented to us by our lender, we could not proceed with the sale. It didn't meet our budget and we begged our relator to guide us in how to move forward and voiding the contract. 

We asked for a denial letter from our lender, only to have received a text message received on that said, " I'm not sure we can even give you a denial letter at all. '' We have been asking and asking for clarification while flagging that this exceeded our expectations financially. We have been pressured and strong armed into purchasing this property NO MATTER WHAT -- at our expense while also threatening legal action from the seller. Our relator also kept advising us to get an attorney when we kept asking for more information and that we didn't have the cash to close. 

We were asked multiple times what what we approved for and the only thing we were approved for was 5 % down. This was " conditionally approved, '' but with buying the rate down ( which we never agreed to ). 

We have spent sleepiness nights worrying about this, trying to get approved, or if not -- receive a denial that states the terms that are in the contract, but the denial sent was vague with no specific percentages attached ; therefore, not meeting the terms of the contract ( which needed to say 10 % ). 

Now we are facing default on a loan that we have been agonizing over for weeks -- trying to either get approved, or get the appropriate letter needed to void the contract. 

We haven't been able to work, sleep or eat over this and here are faced with default and threats of legal action unless we proceed with the sale. 

We have exercised good faith and have been transparent with everyone and now are left with threats and no home.

Company response to consumer: Closed with explanation