Advice And Tips On Changing Lenders During Mortgage Process

This BLOG On Advice And Tips On Changing Lenders During Mortgage Process Was UPDATED On September 13, 2017

When home buyers apply for a mortgage loan, a mortgage loan originator will see whether or not the mortgage loan is a doable deal and predict whether or not the mortgage application will get approved from reviewing the borrowers overall mortgage application and credit profile.

  • In most cases, mortgage borrowers should have no problem in getting a mortgage loan approval and the mortgage loan eventually getting a clear to close and closing as long as the borrower meets all the mortgage guidelines.
  • The mortgage loan officer will check to see if the mortgage company has any overlays and if they do will make sure that the the borrowers meets the mortgage company’s overlay requirements. 
  • However, there are times when mortgage underwriter will knit pick the mortgage application during the mortgage process even deny the mortgage application where borrowers may be forced in taking their mortgage application to another mortgage lender. 
  • Borrowers are working with a mortgage broker, the mortgage broker can easily transfer mortgage application to another mortgage lender. 
  • Borrowers who are working with a bank or mortgage banker can transfer their mortgage application to another mortgage lender without too much red tape.

We will discuss on Changing Lenders During Mortgage Process and how simple the processing of Changing Lenders During Mortgage Process is, especially with FHA Loans.

Case Scenarios Changing Mortgage Lenders During Mortgage Process

Borrowers denied by a mortgage lender or stressing out during mortgage process can easily transfer their mortgage loan file to another lender.

  • Changing Lenders During Mortgage Process is done all the time.
  • The Gustan Cho Team at USA Mortgage can easily assist with the process in helping borrowers.
  • Borrowers plan on Changing Lenders During Mortgage Process with a FHA Loan and already have an FHA Appraisal completed do not need a new appraisal.
  • The FHA Appraisal transfers with the FHA Case Number.
  • I recently closed a FHA Loan where a borrower was stressing with a lender for over three months and The Gustan Cho Team at USA Mortgage closed it in two weeks.

Reasons For Stress During Mortgage Process

There should not be any reasons for last minute mortgage loan denials or stress during the mortgage process. Unfortunately, there are reasons why borrowers mortgage loan application can denied after they were told they were pre-approved by their mortgage.

  • If the mortgage underwriter sees that borrowers debt to income ratio is higher than what the mortgage loan originator has qualified them for.
  • The mortgage lender has a cap on debt to income ratio due to their overlays the mortgage loan can get denied. 
  • Another issue where mortgage loan applications can get denied is if the mortgage company has their own appraisal review process .
  • Mortgage underwriters reduce the appraisal to a lower value.
  • If sellers will not cooperate with lower appraised values, it can kill the deal. 
  • Other cases where mortgage loans can get denied is if the mortgage loan underwriter asks for an updated bank statement and they noticed that had a recent overdraft. 
  • Some lenders will not accept overdrafts.
  • More cases can be where overtime income used in pre-qualification can no longer be used because the mortgage loan underwriter does not feel in his or her opinion that overtime income will continue. 
  • There are dozens of more reasons why mortgage loans get denied during the underwriting process and changing mortgage lenders will be necessary.

Bankers Versus Mortgage Brokers Versus Mortgage Bankers

As a mortgage broker, I have dozens of wholesale mortgage lenders to choose from.

  • There has been cases where I have taken my client’s mortgage application somewhere else because the current wholesale mortgage lender was totally incompetent and have come up with new overlays and did not honor what they have told me during the mortgage pre-qualification process. 
  • When changing mortgage lenders during the underwriting process happens, there are a few inconveniences on both the mortgage loan originator’s part as well as the mortgage loan borrower’s part.

Delays Caused By Changing Mortgage Lenders During The Mortgage Application Process

Sometimes changing mortgage lenders during the mortgage application process is necessary but in most cases, it works out for the best.

  • Maximum delay normally incurred after changing mortgage lenders during the mortgage application process is a week.  
  • A new mortgage application needs to be completed and signed which does not take too long and can be done in a few hours. 
  • If it is an FHA appraisal, it takes a day to do the FHA appraisal transfer and normally does not cost any money. 
  • If it is a conventional loan, we can request a new appraisal with the new lender’s name on it and request a transfer which might take a few days. 
  • All of the documents such as tax returns, W-2s, and bank statements can be resubmitted to the new wholesale lender. 
  • Once the new lender has the complete mortgage application along the required documents and credit report, we can normally get an approval within 24 hours. 
  • Once we get an approval, we can satisfy conditions and satisfy them within 48 hours and get a clear to close.

Changing Lenders During Mortgage Process When Denied For Loan

Borrowers who got denied for a mortgage loan or current mortgage lender is dragging their feet, please contact The Gustan Cho Team at USA Mortgage as soon as possible at 1-800-900-8569 or email us gcho@gustancho.com .  We are available 7 days you can text us at 262-716-8151 for faster response.  If you already have an appraisal, we can most likely get mortgage loan closed in closed in 14 days or less depending on each particular circumstances.

Gustan Cho NMLS ID # 873293

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The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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