How Far Into a Loan Would You Get Before Switching Lenders?

Question

Say you’ve already sent every document, paid for the appraisal, and spent a couple of weeks going back and forth. Then the lender changes the terms or underwrites the deal differently than you expected. Would you eat the appraisal fee and start over with someone else? I feel like once you’ve already put money and time into one lender, it gets really easy to keep going just because you’re already this far in. Where do you guys draw the line?

Andrew Glisson · Answer

If you have a decent relationship with the lender, they will generally assign appraisals over to new lender (if new lender will accept them).

What surfaced during underwriting?

Frankie Vozzi · Answer

Ali, I think the biggest question is why the terms changed. If something new came up during underwriting that legitimately changed the risk of the deal, that's one thing. If the lender had the information from the beginning and the terms suddenly changed anyway, I'd be much more concerned.

The appraisal fee and time already spent are frustrating, but they're small compared with getting locked into the wrong financing or having the deal fall apart later.

Before starting over, I'd ask the lender exactly what changed, why it changed, and whether the new terms are final. If the explanation doesn't make sense, that's probably when I'd start looking at a backup option.

What specifically did they change on your deal? I sent you a DM

Erik Estrada · Answer

I think it comes down to the character of the lender. If they were being upfront about the expectations, terms, time to close, etc.. way before you even submitted an application, than I do think it's unfair to switch around just because you found better terms mid way. At the end of the day we still have families to take care of and monthly business expenses.

If that is the lender's entire strategy, to reel you in, make you pay for an appraisal, and submit, then switch the terms when you are far deep in the process, then I think it is 100% ethical for you to change lenders.

Ernesto Garcia · Answer

Depending on who you are prospecting next, you might be able to use the same report as long as it was ordered using a reputable amc. We accept transferred appraisals routinely and save time as well.