U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
 
Old 11-21-2013, 06:23 AM
 
Location: Tampa Bay, FL
237 posts, read 320,043 times
Reputation: 303

Advertisements

Hello,

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.
Reply With Quote Quick reply to this message

 
Old 11-21-2013, 10:43 AM
 
Location: Southern California
4,350 posts, read 4,929,984 times
Reputation: 2129
Quote:
Originally Posted by dystopian View Post
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.
Reply With Quote Quick reply to this message
 
Old 11-21-2013, 02:18 PM
 
Location: New York
2,251 posts, read 4,160,232 times
Reputation: 1607
.

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.

Good Luck..
Reply With Quote Quick reply to this message
 
Old 11-21-2013, 02:42 PM
 
3,317 posts, read 7,251,326 times
Reputation: 4095
Quote:
Originally Posted by dystopian View Post
Hello,

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?
Reply With Quote Quick reply to this message
 
Old 11-21-2013, 09:31 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
Quote:
Originally Posted by Modification Specialist View Post
.

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.

Good Luck..
she's buying new construction
Reply With Quote Quick reply to this message
 
Old 11-21-2013, 09:41 PM
 
8,768 posts, read 10,329,110 times
Reputation: 13823
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.
Reply With Quote Quick reply to this message
 
Old 11-21-2013, 09:50 PM
 
Location: MID ATLANTIC
7,598 posts, read 17,614,249 times
Reputation: 8078
Quote:
Originally Posted by dystopian View Post
Hello,

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.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Similar Threads
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top