Is There A Time When Am I Committed To Mortgage Lender?
Mortgage loan officers do a lot of work in order to get a clear to close by the mortgage underwriter and close on a mortgage loan borrower’s mortgage loan. Most mortgage loans take at least 30 days while some may go into 45 days to 60 days depending on the mortgage conditions on the conditional mortgage loan approval. The mortgage business also requires mortgage loan disclosures to be sent out to mortgage loan borrowers and if there are any changes from the original disclosures, then re-disclosures needs to be sent out again and again. These disclosures can consist of dozens of pages and many mortgage loan borrowers gets frightened due to the massive amount of paperwork they are receiving which are rather very difficult to understand and many times, the mortgage disclosures are redundant, confusing, and consists of a bunch of legal terminology and may take days for a mortgage loan borrower to review and after reviewing will still not understand what it means. Mortgage regulators have created these disclosures and re-disclosures requirements to protect consumers from predatory mortgage lenders and for consumers to understand mortgage rates, terms, and their rights to shop for mortgage rates and mortgage loans, but these good intent by mortgage regulators have made things worse for consumers. Many mortgage industry professionals and consumer advocate groups recommend a simple one page disclosure sheet instead of dozens of pages of disclosures where it confuses consumers. Many mortgage loan borrowers wonder when am I committed to mortgage lender by signing all of these disclosures. Mortgage loan borrowers also need to provide personal financial documents to their mortgage lenders such as two years tax returns, bank statements, two years W-2s, paycheck stubs, bankruptcy documents, foreclosure paperwork, multiple letters of explanations, and other documents. When am I committed to mortgage lender? Up to the date of the closing of the mortgage loan. Mortgage loan borrowers are not obligated to go through the mortgage loan with their mortgage lender and can cancel at anytime until the date of the mortgage loan closing.
Real Estate Purchase Contract
Once a home buyer gets pre-approved by a mortgage lender, the mortgage lender will issue a pre-approval letter where they can go shop for a home and enter into a real estate purchase contract. The real estate purchase contract will have several contingencies such as a mortgage loan contingency, home inspection contingency, appraisal contingency, and other contingencies where the home buyer can back out of the real estate purchase contract. Real estate purchase contracts are legally binding contracts and can be enforced if it is not written up the right way. It is recommended that home buyers retain a real estate attorney to review the real estate contract and make sure that the contract protects the home buyer and where if something goes wrong that the home buyer can get their earnest money back. Real Estate Purchase Contracts are different than mortgage loan applications where there are stipulations with them and not with mortgage loan applications. A mortgage loan borrower can cancel a mortgage loan application at any time during the mortgage loan process up to the date of closing and are not obligated under any circumstances to commit to the mortgage lender. On refinance mortgage transactions, the mortgage loan borrower can cancel three days after closing which is called the rescission period and the refinance mortgage loan funds with not fund until three business days after closing.
Cases Where Mortgage Borrowers Cancel Loan During Mortgage Process
The majority of mortgage loan borrowers do not cancel their mortgage loan application during the mortgage loan application and mortgage approval process. However, there are cases where mortgage loan borrowers cancel the mortgage loan application and decides to go with another mortgage lender. Whether it is due to delays in turnaround times or due to mortgage lender overlays or sometimes is due to not getting along with the mortgage loan originator. Whatever the reason may be, mortgage loan borrowers are not obligated to the mortgage loan with a particular mortgage lender and are not committed to go through with the mortgage loan with the original mortgage lender. If the mortgage loan borrower has applied for a FHA Loan and a FHA appraisal has been ordered and completed and paid for by the mortgage loan borrower, then that FHA appraisal can get transferred to another FHA mortgage lender and there is no cost out of pocket. There may be delays in closing the mortgage if the borrower changes lenders during the mortgage loan process, but they can always ask for an extension from the home seller and most often, the home sellers will grant an extension if the home buyers changes mortgage lenders during the mortgage loan approval process.