This BLOG On Transferring Lenders During The Home Buying And Mortgage Process Was PUBLISHED On August 31st, 2019
The mortgage process should not be stressful.
- All mortgage should not only close but should close in time
- There are situations where closing delays happen but it should not be due to the lender
- Over 75% of our borrowers at Gustan Cho Associates are folks who are either stressing during the mortgage process and/or have a last-minute loan denial
- Homebuyers are dependent in the mortgage pre-approval by their loan officers
- Not just home buyers, but also real estate agents, attorneys, title companies, movers, and other third-party vendors
- The number one reason for stress during the mortgage process and delays in closings is due to the loan officer not properly qualifying borrowers
- Loan Officers should never issue a pre-approval letter if there is even a 1% doubt that the loan will not close
- Especially closing in time
- Transferring Lenders during the mortgage process is very common
- Transferring Lenders is a very simple process and is streamlined
- Most Transferring Lenders during the mortgage process can be done in a day or two
In this blog, we will discuss Transferring Lenders during the home buying and the mortgage process.
The Importance Of A Solid Mortgage Pre-Approval
The pre-approval step is the most important stage of the overall mortgage process.
- Homebuyers trust the home buyer’s pre-approval is solid
- Unfortunately, there are still loan officers in the mortgage industry who just issue pre-approval letters without fully qualifying borrowers
- Borrowers then take the invalid pre-approval to enter into a real estate purchase contract
- Due to the incompetency of the loan officer, the whole mortgage process gets railroaded
- Homebuyers, sellers, realtors, attorneys, title companies, and even the lender will stress due to the sloppy pre-approval that triggered all this
- Homebuyers may lose their earnest money and appraisal fees
- They often cancel their children’s schools and enroll them at the new school
- They make arrangements and enroll their children at the new school
- Sellers trust that the home buyer will close on the home purchase
- The home buying and mortgage process can get really ugly for buyers and sellers if the borrower is stressing during the mortgage process with an incompetent lender
Transferring lenders may be the only option to salvage the home purchase contract.
How To Properly Qualify Borrowers Prior To Issuing Pre-Approvals
This paragraph is geared more towards loan officers. Loan officers should never issue a pre-approval letter unless they properly qualify their borrowers. Loan officers need to realize their borrowers and their families are relying on them is not just closing their home loans but closing it on time.
Here are the steps that should be taken prior to issuing pre-approval letters:
- Make sure that the borrower meets all agency mortgage guidelines
- Most lenders have lender overlays
- Check to see if your employer has overlays that may affect your borrowers
- Thoroughly review borrowers credit report and make sure there are no credit disputes and/or errors on the report
- Thorough go over line item per line item with the borrowers
- Make sure there are no public records such as judgments, tax liens, bankruptcy, foreclosure, that are out there but does not report on the credit report
- All lenders will do a national third-party public records search through Lexis Nexus, and/or Data Verify
- All public records will be discovered even though it does not report on the credit report
- Income and debt to income ratios should be carefully reviewed
- If any doubt with higher debt to income ratio borrowers, get a second opinion by a mortgage underwriter and/or order a Verification Of Employment prior to issuing a pre-approval letter
- Make sure you get an approve/eligible per automated underwriting system
- Thoroughly review mortgage documents
- Especially bank statements
- Review bank statements for irregular deposits, withdrawals, and overdrafts
Main Reasons Transferring Lenders During The Mortgage Process
There are many reasons for transferring lenders during the mortgage process by borrowers:
- Loan Officer does not return calls and/or emails promptly for days
- Borrowers get conditional approval and underwriter keeps on issuing new conditions after conditions have been submitted
- Underwriter keeps on coming up with additional overlays after overlays
- The lender has no regard in meeting the closing date
- A last-minute mortgage denial gets issued after conditions were all turned in
Whatever the reason for transferring lenders during the mortgage process, it is very easy and streamlined to fire your current lender and hire a new lender to represent you.
Steps In Transferring Lenders During The Mortgage Process
Transferring lenders from one lender to another lender is very simple. There is no cost in transferring lenders. A lender you fire cannot charge you anything nor can they not let you not to transfer. Re-apply with the new lender. Submit all the same documents to the new lender. FHA and VA Appraisals can be transferred. If a conventional appraisal has been done, conventional appraisals cannot be transferred. The new lender will order a new conventional appraisal. Most new lenders like Gustan Cho Associates will expedite all transfers so the borrower can close in 10 business days or less.
For more information on the content of this article and/or other mortgage-related topics, please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at firstname.lastname@example.org. Gustan Cho Associates Mortgage Group is available 7 days a week, evenings, weekends, and holidays.