My first choice Bank for a mortgage is taking a long time, can I go to another bank?

Question

I need to close in two weeks! Although I 've received a commitment, they are still "reviewing my paperwork" Can I run to another bank and see if they give me a quicker response or is there some kind of restraint that stops me if I already have a commitment with one bank?

Answer 1

It's called double app'ing.  It happens all the time.  Take your paperwork and your commitment letter to another lender.  Tell them you're double app'ing and first one to doc's wins.

Don't cancel either of the banks until the other one closes.

Answer 2

What you should have done is gone to a mortgage broker instead of a particular lender. A mortgage broker gets rate sheets from lots of different lenders and can help you choose a mortgage product that's best for you. He can then submit applications to a number of them and see who comes back with the best terms (sometimes terms change between getting the rate sheet and locking in the loan) and who can fund the loan quicker (a friend of mine is a mortgage broker and he talks directly with lenders all the time).

Also, keep this in mind: When you have lender approval, you have the option of locking in the interest rate. This is usually a fee of a coupla-few hundred dollars. If you then need to extend that lock-in because of some delay on your part, you have to pay the lock-in fee again. And, if you decide not to take that loan and want to go with another lender, the approval process starts all over again, including a new lock-in fee.

You have no constraints as to how many lenders you can apply with. But, I recommend you stay with the current lender. You're already this far into the process with them and starting over will probably take longer than just waiting out the funding with this lender.  

Answer 3

Rosite, you certainly have the choice, but you don't want to do anything to delay a closing. I would strongly suggest to them, that you are considering going elsewhere if they can't make a decision based on the financial information they currently have. Give them a deadline. Sometimes the rules changes for these lenders and they find themselves with potential loans that won't make them money.  So they delay in making a decision on a potential clients loan to see if the rules change again, or the rate comes down. It's a business decision.

So I see no problem with you're changing lenders, you just want to make sure it doesn't delay the closing.  

Answer 4

Two weeks is plenty of time. Typically, loans get attention in order of closing dates. You do not have a "commitment" if they are still reviewing your paperwork.

A commitment comes once an underwriter has signed off on the file or issued a "clear to close". At that point it moves in to closing and then it can be scheduled. Once it is scheduled, the docs are sent to the title company and the settlement statement can be prepared. That should be done no later than 24 hours prior to closing.

You need to get a straight answer from your current lender as to what the status of the file is. Ask them if they have the clear to close. If not, what conditions are remaining? They should be able to answer these questions.

I wouldn't suggest that you should go to another lender so quickly. However, if there is a problem with your loan, you have a right to know that so you can look at other options.

Press for answers. No news is not good news. It is just no news.  

Answer 5

Why would you want to start all over again? It is a little too  late for that. Just be patient!