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So, I purchased a home and it has just begun being built. Scheduled to close around end of April.
They had a preffered lender who I would get some closing cost incentive if I went with them. I went through underwriting but some of the things they were doing really bothered me but we worked past them and I am approved and ready to go.
However, there was a moment when underwriting was saying all kinds of crazy stuff and I got a bit concerned and went to another bank who had previously gave me a pre-approval when I first entered the housing market. They asked for the GFE the preffered builder lender gave me and they felt confident they could beat the deal.
I am waiting for their response however I have been thinking, is this acceptable? Changing lenders after one lender has put your loan through underwriting? Is it ethical if a better deal comes along?
Also, if they locked the rate/terms and I cant change them, what if I can get a better rate/term with someone else, they just let you leave or will they match/drop the rate to keep me as a customer?
Also, if they locked the rate/terms and I cant change them, what if I can get a better rate/term with someone else, they just let you leave or will they match/drop the rate to keep me as a customer?
Thanks for any feedback and insight.
It doesn't hurt to ask, but sometimes they can't drop/match other offers.
If underwriters didn't say crazy stuff , they'd be loan officers.
IMO Rules have changed to benefit consumers at the expense of hurting smaller brokers, but it is what it is.
Changing after underwriting is basically starting all over, ethically, moral that is for you to decide there is no book of ethics for consumer finance.
I understand you are at a cross road and you're torn on which way to go. Your trying to complete your jigsaw puzzle and you don't have all the pieces.
Until your closing you can say cancel my application and go with any lender you want. On purchases once you walk away from closing, the house is yours (as in no rescinding period). Plus you are locked into your loan.
Not clear on what you said about you purchasing the home and building has started. You haven't had your closing yet? The builder would need some type of commitment letter to purchase materials to begin construction. Did if you put money down for this process to start?
You shopping for loans with a GFE... - this is not a smart idea because is only an estimate. Your setting yourself up to a bait and switch situation. Trying to go to another lender, anyone could play with the numbers to make them look better, because the final costs are not determined until you get to closing.
Years ago as an L/O worked with a guy in Florida, rebuilding his credit over a year. When his score was high enough begin working on his loan. Right before closing his father introduced him to broker that offered a GFE showing 0.5% lower interest rate. He got to his closing the rate changed 0.75%. He called me up apologizing.
This other lender saying they feel confident they could beat the deal. If they can - say you want a commitment letter before you start changing things around.
So, I purchased a home and it has just begun being built. Scheduled to close around end of April.
They had a preffered lender who I would get some closing cost incentive if I went with them. I went through underwriting but some of the things they were doing really bothered me but we worked past them and I am approved and ready to go.
However, there was a moment when underwriting was saying all kinds of crazy stuff and I got a bit concerned and went to another bank who had previously gave me a pre-approval when I first entered the housing market. They asked for the GFE the preffered builder lender gave me and they felt confident they could beat the deal.
I am waiting for their response however I have been thinking, is this acceptable? Changing lenders after one lender has put your loan through underwriting? Is it ethical if a better deal comes along?
Also, if they locked the rate/terms and I cant change them, what if I can get a better rate/term with someone else, they just let you leave or will they match/drop the rate to keep me as a customer?
Thanks for any feedback and insight.
What would lead you to believe that the other bank doesn't have underwriters too?
I understand you are at a cross road and you're torn on which way to go. Your trying to complete your jigsaw puzzle and you don't have all the pieces.
Until your closing you can say cancel my application and go with any lender you want. On purchases once you walk away from closing, the house is yours (as in no rescinding period). Plus you are locked into your loan.
Not clear on what you said about you purchasing the home and building has started. You haven't had your closing yet? The builder would need some type of commitment letter to purchase materials to begin construction. Did if you put money down for this process to start?
You shopping for loans with a GFE... - this is not a smart idea because is only an estimate. Your setting yourself up to a bait and switch situation. Trying to go to another lender, anyone could play with the numbers to make them look better, because the final costs are not determined until you get to closing.
Years ago as an L/O worked with a guy in Florida, rebuilding his credit over a year. When his score was high enough begin working on his loan. Right before closing his father introduced him to broker that offered a GFE showing 0.5% lower interest rate. He got to his closing the rate changed 0.75%. He called me up apologizing.
This other lender saying they feel confident they could beat the deal. If they can - say you want a commitment letter before you start changing things around.
Read the purchase contract carefully. You may find that the construction start was based on an approval from the original lender. If you notify the builder (which virtually all new construction contracts require) that you are changing lenders, they may halt construction until they receive a firm loan approval from the new lender.
You may also have incured cost associated with the original loan that is being rolled into the loan or due at closing. Those cost most likely will be due upon terminating the loan with them.
So, I purchased a home and it has just begun being built. Scheduled to close around end of April.
They had a preffered lender who I would get some closing cost incentive if I went with them. I went through underwriting but some of the things they were doing really bothered me but we worked past them and I am approved and ready to go.
However, there was a moment when underwriting was saying all kinds of crazy stuff and I got a bit concerned and went to another bank who had previously gave me a pre-approval when I first entered the housing market. They asked for the GFE the preffered builder lender gave me and they felt confident they could beat the deal.
I am waiting for their response however I have been thinking, is this acceptable? Changing lenders after one lender has put your loan through underwriting? Is it ethical if a better deal comes along?
Also, if they locked the rate/terms and I cant change them, what if I can get a better rate/term with someone else, they just let you leave or will they match/drop the rate to keep me as a customer?
Thanks for any feedback and insight.
Having a second option is an excellent option based on the statements you made. It's not always about money and there certainly is something empowering about telling someone you are picking up your cookies and having your tea party elsewhere. You may have to double up on a couple fees (appraisal), but it will keep you in the driver's seat. If you are going to incur the dual expense, may as well take advantage of it............lock with the first lender at the earliest opportunity (earliest point without any fees) and float with the other........unless something makes you want to go with the second lender (then you can do visa versa)........and for the record, most lenders will match rates anyway if they are about to lose a loan.
Now, would I be ticked as a loan officer (either one), probably. No one enjoys being double app'd. But I also work my tail off making sure everyone's loan is "right" and fight any conditions I would be offended to receive, myself (and this is before the conditions are even called out to the customer). The second part of the job is to make sure you understand the reasoning behind each condition, even if it sounds loony. This is your most expensive purchase and you need to treat it as such. Doesn't your lender need to as well? And if the answer is a second lender, don't hesitate.
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- this is not a smart idea because is only an estimate. Your setting yourself up to a bait and switch situation. Trying to go to another lender, anyone could play with the numbers to make them look better, because the final costs are not determined until you get to closing.
