Changing Lender after Appraisal

[Eka Linwood]

So, this is probably my fault for not doing a better due diligence ahead of time.

We got under contract early Jan for a closing date of Feb 20, and this is my first time buying a house. I got a pre-approval from Lender A, and right after the Seller accepted the offer, I went shopping for Financing.  I went to Lender B, C and D.  Only Lender B were able to get back to us with a loan estimate.  Lender C and D were not able to, due to the various complexities on the deal.

Just last week, I got curious and read up on FHA rates some more. I found a new Lender (Lender X) that is publicizing 0.25% better rate. Now, my credit score is excellent and DTI is very low, so I should have no problem qualifying for the best FHA rate. I do prefer to sign up for the least amount of down-payment (FHA 3.5%) though, so there is that.

Since I thought this issue is closed, I ended up getting this Lender to proceed with the whole process.  The only thing pending right now is the appraisal (ETA: Jan 31) and the Home Insurance (After Appraisal).

If Lender X rates (2.75%) come in significantly below Lender A's rates (3.0%), I see two scenarios:

• I move to Lender X - potentially jeopardizing the deal and have the Appraisal moved to Lender X or maybe paying for another appraisal altogether.
• I stick with Lender A and ask them to match this new Loan Estimate from Lender X.

My questions are:

• Would it be ethical to do this to the Lenders? 
• Is it possible to "move" appraisals to the new Lender?
• What are the chances of this action jeopardizing the deal?

[CJ M.]

@Eka Linwood

It's not "unethical" to switch lenders, but you may be giving up more than 0.25% if you switch. For starters, your time. Secondly, appraisals are typically ordered by the lender. It's unlikely they can be switched as the appraiser works for that lender. You'll probably need to pay for a new appraisal. Now, here's the risk, say you move forward with this new lender and their appraisal comes in lower. What do you do now? You can go back to the original lender, but now you've lost more time, and paid for 2 appraisals.

In my opinion, you are bending over dollars to pick up nickels. I would either try and negotiate the rate down with your current lender or just move forward with them. Best of luck!