Can I switch mortgage lender?

[Michael Stole]

I have spent so much time with a mortgage lender, who has done an appraisal on the property. I almost for sure with get mortgage from this bank.

However, another bank replied to me today with a much attractive term (much lower down payment). The closing date is mid October.

Can I still change my mortgage lender? And if so, how should I proceed to minimize the bad feeling of the first lender? I am thinking of paying him even if we do not get mortgage from him, and how much do you think is proper? Thanks.