Unexpected Rate Increase on BRRRR Loan – Is This Normal?

[Ryan Dunn]

Hi,

I have two BRRRR loans with Fixated Funding, both starting and closing on the same day. One loan was locked at 6.9%, the other at 7.1%. However, I just received the closing docs, and the rate on the 6.9% loan has been increased to 7.8%. I wasn't notified about this change until I saw it myself.

When I asked why, they said the home inspection found some issues that were fixed and re-inspected, but I’m confused why this would result in a rate increase. Also, Fixated moved my closing date a few times, but luckily I didn’t have another deal at risk.

Does this sound typical? I’m mainly concerned about the rate change happening without prior notice, especially since both loans started and are closing on the same day.

I’m scheduled to sign tomorrow and close on Friday. Any advice would be appreciated!

Thanks!

[Patrick Roberts]

Not going to lie, this sounds sketch. A locked rate can change for a lot of reasons, but any competent lender should have the decency to notify you of the change, regardless of whether they may not be required to do so if this is a nonQM/commercial loan.