Sometimes things just don’t work out. For whatever reason, you might start to get the feeling you chose the wrong mortgage company. Or more specifically, you might have chosen the wrong loan officer. A mortgage lender’s reputation is on the line due to the performance of its staff. A mortgage company can spend a lot of money marketing the company, but it takes just one bad loan officer to cause a borrower to wonder if the right choice was made. If you want to change lenders, here are some things to expect.
The first is that you’re under absolutely no obligation to continue to work with the mortgage company, even though you completed the loan application and submitted all your documentation. You can put the brakes on at any time you like. Maybe the rate you thought you locked in wasn’t locked after all and market rates are higher than what you thought you had. Or maybe getting a return phone call from your loan officer is almost like pulling teeth. For whatever reason, you don’t have to stay mired in your own personal financial mud pit. Just change.
One situation to understand is that your loan application and documentation can’t simply be transferred to the newly chosen mortgage company. The lender won’t send your loan package with all your paycheck stubs, tax returns, bank statements and the like. If you switch, you’ll need to apply for a loan directly with the new mortgage company. The new mortgage company will then supply you with a list of things needed in order to move forward with your loan, just like you did with the first one. Besides, even if you could, it’s likely the documents are too old to be used. Credit documents such as a credit report, paycheck stubs and other documentation needs to be less than 30 days old. If you switch mid-stream, doing so will add more time to your ultimate loan approval.
Making a change also means the old appraisal that you paid for cannot be moved over, either. Even though you paid for an appraisal the first time around, the appraisal belongs to the lender. The lender’s name will be on the front of the appraisal report, not your name. It’s also possible to get a ‘re-type’ which means the initial appraisal will change the name of the lender on the front of the report but that’s a rarity. A new mortgage lender will want its own appraisal and place a new appraisal order through one of their appraisal management companies.
Some borrowers can discover that the rate they locked in at is currently higher than what other mortgage companies are quoting. That’s certainly a reason to switch lenders but it’s also possible the current lender will want the opportunity to quote a new rate in an effort to keep your business. You may not get the absolute lowest rate available, but you’ll be close.
If you decide to switch lenders, remember you’ll have to walk the very same path as you did the first time around. Just be patient, work with your new loan officer, and move on.