Writing a Home Loan Cancellation Letter (with Sample) Use this sample home loan cancellation letter as a template for your formal cancellation letter.
There are several reasons why a person may want to cancel a home loan application after he or she has submitted it to the lender. For example, the borrower may make applications to several lending institutions at which time they will receive information about the interest, fees and other closing costs.
They may receive a better offer from another lender and want to cancel the applications they gave to other lenders. The loan applicant may cancel at any time before the loan is closed. There may be a penalty fee, the application fees may be lost, and the lender may make every effort to stop the cancellation.
As soon as the applicant knows they will be cancelling the loan, they should call the lender’s representative and inform them. It is the lender’s job to try to talk the borrower out of cancelling, but if the borrower has his or her facts in order, there should be no argument. A phone call is necessary because the longer the application is open, more fees can be charged such as appraisal fees. The applicant can request any forms that are required for cancellation by the lender, and they can ask about cancellation fees. They can also ask for confirmation of the cancellation in writing.
Once the lender is informed by phone, the applicant should write a home loan cancellation letter that includes the number of the application and the facts connected to the reason for cancelling. The letter should state that the application and loan review process to qualify for the loan should stop immediately.
The letter should include the name of the applicant, the date of the application and the number of the application, and it should be typed and not handwritten.
The home loan cancellation letter should be in formal business style and have a professional tone. It is not the place to complain about the service of the lender or express anger, for example, if the lender did not provide the service they promised. The letter should clearly state the reason for cancelling the loan with supporting facts.
If the lender has already incurred expenses such as appraisal fees or credit check fees, these will be charged to the applicant. Proof that the lender paid these fees should be sent along with the bill from the lender. If the lender paid for an appraisal or a credit report, they should request a copy of each.
The borrower should follow any instructions given by the lender for cancelling the loan application. Doing this will block any loophole that the lender may find as an excuse not to cancel the application.
Here is a sample home loan cancellation letter. It should be sent by certified mail so the applicant has proof of the time and date it was received. The cancellation form enclosed may be the original, but the applicant should save a copy.
Approximately one week after the lender received the letter, the applicant can call the lender to confirm that the loan application has been cancelled and that there is no further action required on the applicant’s part.
Sample Home Loan Cancellation Letter Applicant’s Name Applicant’s Address City, State, Zip Code
Loan Officer’s Name Lending Institution’s Name Lending Institution’s Address City, State, Zip Code
RE: Requesting cancellation of loan application number NUMBER
Dear Name of Loan Officer,
This letter is a formal request to cancel the loan application I filed with Name of Lending Institution on DATE. I also submitted the documents you requested for approval of the loan on that date. I understood when I called you on DATE that I will lose my application fee and that there is no cancellation fee.
Even though I was told by you that I would receive knowledge of acceptance or rejection within two weeks of the date I filed the application, I have not received any notice to date. Since I didn’t receive notice during the time you mentioned, I made other loan applications to other lending institutions.
I have since been granted the type of loan I require, and would like to cancel the application I submitted to you. I have completed and enclosed the forms you gave me for requesting a cancellation of my loan application, and request notification in writing that my loan application is cancelled.
I also request that you return all the documents I submitted to you with my application as soon as possible, so that I can submit them to the new lender. Please contact me at 555-123-4567 or at [email protected] to tell me when I will receive my documents or give me a time when I can collect them from your office.
Thank you for your quick attention to this matter.
Signature of Applicant Printed Name of Applicant List of enclosures: Cancellation Forms