Which mortgage company to chose?

[MonkeyMan17]

Okay maybe someone with a little more savy can help lead me in the right direction. I pased automatic underwriting, got pre-approval or pre-qualifying letters from three lenders. I am ready to begin looking for a home.

Here is my question. Once I have a purchase contract can I send it to two of the lenders to see which one I can lock into for the best rate? Will I need to order an appraisal with both lenders? Can I proceed with two lenders at the same time until I receive final underwriting approval and make a decision on which lender to go with?

[BrianB_The_Loan_Professor]

You need to decide before you get that far

If using FHA you can only have one appraisal and one case number for the property

If conventional you may be able to get away with it but that is asking someone to do work for free when you know they arent going to get your business

Shopping is what you have already done

by now you should have a fee for the people you are working with and be able to make a decision

Good Luck

[Anonymous]

Uhh, ohhh.  I received 3 pre-approval letters before making an offer on a house.  Got a signed contract with 30 days to obtain final funding.  Put all my eggs in one lender's basket, and after almost 3 weeks of the 30 days had ticked by, they came back and denied my loan (long story).  So, I went back to the other 2 lenders and submitted everything.  My mind-set was whichever lender got me to the finish line first is who I would go with.  Neither of them have ordered appraisals yet (I'm calling daily), but both are in underwriting.  On both applications, it specifically states that completing the paperwork does NOT commit me to the lender/mortgage.  For one lender, I had to pay the appraisal fee up front, but for the other, I have not paid anything.  And one of the lenders knows about the other one.  My 30 days runs out this Friday.

When you say you can only have 1 case number for the property, is the case number associated with the appraisal?  Or is it associated with the actual loan application?  And what happens if you have more than 1?  New worries now added to the ones I've been carrying for the last 30 days...great!

[BrianB_The_Loan_Professor]

If Using FHA there is a case number assigned to the property. Also if an appraisal was done and assigned to that it stays with the home and anyone that takes on the case number has to use the original appraisal. This is not the case with a conventional loan. As long as you are up front with the people you are working with about what you are doing and they are willing to work under those circumstances then it isnt that big of a deal. However to have 2 people work to the finish line to then tell one of them that there work was for nothing is unfair to them. This is a comission job and time spent working on a dead file is time that could have been spent elsewhere - also there is costs associated with doing a loan - all of those fees that you pay at the end are for the work that has been done -If you dont close the title company - the underwriter - the loan officer - the processor all have worked for nothing.

I guess it is just the other side of the coin.

Good Luck

[Anonymous]

Hi, Brian:

You raise an interesting point, and one that I don't know much about, can't find out much about.  Exactly what is it that the loan officer, processor and UW do?  I understand that the LO talks with me on the phone, obtains my information, plugs it into a computer program, then sends me all of the paperwork that I need to complete.  For all of my LOs, this part happened in approximately 15-20 minutes on the phone.  I completed everything and sent back to them within an hour or so.  They then compile that information and send it to the processor, yes?  Who then sends it to the underwriter?  I'm not sure what a processor does, but from what I understand, the UW "verifies" all of the information you've sent to the LO, makes sure everything falls within the guidelines of whatever mortgage product you are applying for (which the LO, the automated underwriter system and the processor are also supposed to do, yes?), perhaps add in some subjective judgment based on experience about whether the loan is "good", then gives thumbs up or thumbs down?  (Oversimplified, I know, but have no clue as to what degree.)

After reading what I've written thus far, I apologize if I'm coming across as snide...it is not intentional, I promise. I am truly trying to understand what these folks are "doing" as part of the process?  Don't get me wrong...giving me $265k is HUGE!!!  I'm just trying to learn more about the process behind the scenes, since no one ever seems to talk about this.  And as a business owner myself (who earns only that which I sell), I certainly don't want to screw anyone in this process.  I am a very loyal individual, and if I know someone is working hard for me, I will make sure I work hard for them by shouting their services from the rooftop, giving them repeat business, and paying them for the work they do. Any insight into the behind-the-scenes work would be greatly appreciated!

[BrianB_The_Loan_Professor]

Not snide - frustrated

I have been in the LOs spot on a few of these and it stinks - of course I wasnt the one losing the home so the stress was different

still it is rough when you cannot get a straight answer. I have left that situation behind

and hope not to encounter it again

I

[Anonymous]

Gotcha'.  And yes, frustrated is an understatement right now.  Sorry that is coming through so very clearly.   But I really was serious regarding wanting to know what the LO, processor and UW "do."  I truly don't know beyond what was in my previous e-mail. 

[MonkeyMan17]

Well here's my point of view. I am moving to another state. With all the talk in the news (and on this board) about lenders turning down loans/not funding loans I can't afford to get to the finish line and have to start again.  I have given the LO's all the info they need/have requested, I have been told I have passed automatic underwriting, I have been issued pre-approval letters, however they all say subject to final underwriting approval. On top of lack of "full" assurance there is a difference in fees/closing costs that change almost daily due to market conditions. It is a VA loan so I'm not sure about case numbers. I have pretty much chosen the lender/LO I plan on working with, however I would feel much more confident if I had a backup "just in case". I don't mind paying for an extra appraisal if it assures me that I'm not packing and moving with no place to live. As far as a LO working and then getting jilted, well not my problem. I'm the one spending a quarter million dollars and I should have the best assurances possible. Is the LO going to reimburse me for the time and effort spent choosing what I think is the best lender/deal when I get to closing and my loan is not funded because market conditions have changed and my mid score needs to be 700 instead of the 696 it is now or some other change in underwriting requirements? It should work both ways. However I realize I'm just a number/statistic to a LO and UW and they are not concerned with the angst and troubles a hombuyer goes through, only the commission they make. They work with statistics and probabilities when funding loans, not people.

[Anonymous]

I completely understand your point of view, MonkeyMan.  My preapproval didn't even say it was contingent on final underwriting, as they had already verified everything in my application.  It only stated it was contingent on appraisal and pest inspection.  Yet I was still denied the loan in the end.  But I don't have to move next door, let alone across country.  I can't imagine being in your shoes. 

But, I have just discovered that what Brian was saying is very true.  I just received an e-mail this morning from the LO at the bank saying that I need to write a letter to the mortgage broker (who is also processing an application for me) and ask that the FHA case # be transferred to them!  In other words, it seems like only 1 institution can be in possession of the FHA case # at any one time?  As of this moment, I think I should stick with the mortgage broker since they appear to be steps ahead of the bank?  In addition, the mortgage broker has NEVER avoided my phone calls or e-mails (I don't think I've ever even had to leave her a voicemail).  Only thing is, I think the processing fees are substantially higher (over $9k total, but they are giving me a $5k + "credit," so still leaves it at over $4k).  However, the bank has not given me any good faith estimate at all, so I have no clue what their fees are!  I don't know...very overwhelmed at this point.

MonkeyMan, it sounds as though you have taken each application as far as you can and have made a decision as to who to work with.  But my word of advice is not to give that person too much time to get the final approval processed.  Do some research and find out the typical underwriting time, then hold their feet to that deadline.  If they don't meet it, move on to the next in line.  Good luck!!! 

[ArmyStrong]

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@Anonymous wrote:

I completely understand your point of view, MonkeyMan.  My preapproval didn't even say it was contingent on final underwriting, as they had already verified everything in my application.  It only stated it was contingent on appraisal and pest inspection.  Yet I was still denied the loan in the end.  But I don't have to move next door, let alone across country.  I can't imagine being in your shoes. 

But, I have just discovered that what Brian was saying is very true.  I just received an e-mail this morning from the LO at the bank saying that I need to write a letter to the mortgage broker (who is also processing an application for me) and ask that the FHA case # be transferred to them!  In other words, it seems like only 1 institution can be in possession of the FHA case # at any one time?  As of this moment, I think I should stick with the mortgage broker since they appear to be steps ahead of the bank?  In addition, the mortgage broker has NEVER avoided my phone calls or e-mails (I don't think I've ever even had to leave her a voicemail).  Only thing is, I think the processing fees are substantially higher (over $9k total, but they are giving me a $5k + "credit," so still leaves it at over $4k).  However, the bank has not given me any good faith estimate at all, so I have no clue what their fees are!  I don't know...very overwhelmed at this point.

MonkeyMan, it sounds as though you have taken each application as far as you can and have made a decision as to who to work with.  But my word of advice is not to give that person too much time to get the final approval processed.  Do some research and find out the typical underwriting time, then hold their feet to that deadline.  If they don't meet it, move on to the next in line.  Good luck!!! 

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As of January 1, 2010, lending institutions aren't "required" to give GFE's anymore. I had a lender attempt to explain why recently but....<shrugs shoulders>

http://ficoforums.myfico.com/fico/board/message?board.id=loans&message.id=60908#M60908

I received something called a "closing cost worksheet" from Suntrust, and a "personalized mortgage quote" from USAA. The CCW from SunTrust seemed much more detailed, like GFE's were, but the bottom line on both looked very similar. So while they can't  won't give you a GFE, they can give you an estimate of costs of some sorts.