Am I committed or can still go with another Mortgage Lender?

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I was pre-approved with both Guaranty Bank mortgage and Capital One Home Loan. Guaranty Bank issued me a Good Faith Estimate Settlement Charges and Capital One didn’t. At the bottom of this GFE I saw my full legal name printed and the loan officer’s printed as well. But no actual signatures!

I included the pre-approval letter from Guaranty Bank with the offer I wrote to the seller.

I first decided to go with Guaranty Bank so, I provided the Guaranty Bank mortgage officer my paytubs, bank statements etc.

Due to unclearly charges explained and I don’t feel comfortable with this loan officer. I now want to go with Capital One since this Capital 1 officer is more sincerely helping.

Have I committed to Guaranty Bank since I provided my bank statement and paytubs?

Can I go with Capital One now? or I’m either stuck with Guaranty Bank or paying $ 500 commitment fee to get out?

How does it work if I showed pre-approval letter from Guaranty Bank to the seller, and the mortgage loan will be from Capital One?

This is FHA loan

Loan officer said that I was approved for the FHA home loan, and she was waiting on final ok from underwriter. She also said that the appraisal and title work had been ordered.

  1. Reply
    February 21, 2011 at 9:21 am

    I asked 3 lenders for pre-qualification letters so I could compare rates & costs .
    I gave all of them banking and other info .
    None of them asked for $ $ $ in advance .

    I choose the one with the best rates .

    You are not obligated to any of them unless you have signed loan papers .
    I did Not have to pay any commitment fee so I can’t advise you there .
    Never heard of that fee .

    I only made an earnest money deposit which went to escrow for the seller .

    I choose my brokerage and advised the other 2 lenders that they had Not been chosen as the lender and thanked them for the submissions .


  2. Reply
    February 21, 2011 at 9:42 am

    You have every right to change. If they required you to pay a non-refundable fee at application then you dont get that back, but if its worth you going to the other loan officer then switch. Just ask the new loan officer for a pre approval letter so you can also provide that to the realtor. Keep them in the loop cause they should be in contact with your loan officer through the process.

    Oh, just ask for your bank statements and paystubs back when you advise them you are going somewhere else. They have no right to keep from you. If you gave them copies then dont worry.

  3. Reply
    February 21, 2011 at 10:07 am

    I have worked in the mortgage industry for about 10 years and can tell you how these things work for the loan officers end. A GFE is just an estimate and most will provide you one real fast if it means they can get a commitment out of you, whether it’s verbal, written or monetary. This is a common sales tatic in order to get you to hand over your paystub and other financials so they can get started on your loan. Because they provided you with a GFE and estimate being exactly what it is the fees can go up or down (and they normally go up) and it’s perfectly legal. Also, until they actually “lock in” your rate they can quote you any rate they want too. The only way to know that the rate they quoted you is the rate you are getting is if they provide you with a rate lock showing the rate has been locked in. The thing is until you officially sign the closing documents ( which are the last documents you sign on the day you are actually “buying” the house) you can change lenders during that time for any reasons and fee changes being a big change. The things that are a big deal that made certain people in my company lose clients was mistrust, fee changes, or term changes. If Capital One makes you more comfortable go with them. However, if it’s about rate/term and fee shopping then give Guaranty Bank a chance to compete and win back your business. If your all about going with the guy you trust then show Guaranty the door.

    In this type of market I would keep them both working till the end just because anything can make a break a loan and the last thing you want to happen a few days before the loan closes is have one of them reject the loan because of one thing or another. This is becoming more common in this market as banks are being very cautious about who they lend to. Most loan officers are not making the kind of money they use to and are more willing to fight till the end for your business. They don’t get paid unless your loan closes so they really want to keep your business.

    If you do end up going to Capital One your real estate agent can submit an addundum to the seller’s agent letting them know you have changed lender’s. It’s not a requirement but more of a courtesy.

  4. Reply
    February 21, 2011 at 10:57 am

    At this point you are not commited to them, nor do you pay a commitment fee to them if you are changing lenders. Get Capital One to issue you a Pre-approval letter and move forward with them. They should also get you a GFE, it is required!

  5. Reply
    February 21, 2011 at 11:04 am

    If they are going forward with the process, you are probably fine. They are looking at
    *unpaid bills
    *bills paid late
    *level of current debt
    *level of available credit
    *# of open accounts

    If you pay on time and aren’t already overwhelmed with debt, you shouldn’t have to worry.

  6. Reply
    February 21, 2011 at 11:53 am

    Buying a home can be crazy and nerve racking but if you’ve already been approved they are probably just making sure things are all in line. Trust me underwriters take a while and they may not even be doing much just taking their time. This happens a lot in the mortgage business. Most likely nothing to worry about, they just have to send everything through again and again for final approval then you’ll be all set. Hang in there 🙂

  7. Reply
    February 21, 2011 at 12:30 pm

    If your loan officer is telling you are approved but is waiting on final ok from underwriter, what you have is a computer approval WITH contingencies based on a credit report and information from your application.

    Your approval is not an Approval until all required items are in your file and the underwriter has reviewed and approved.

  8. Reply
    February 21, 2011 at 12:39 pm

    Everything from your credit history, debt ratios, income, and assets are all looked at BEFORE an approval is given. If they recieved an approval ask to see it. Approvals are faxed or emailed directly to the broker. Tell your loan officer to quit buying time and get straight to the point. Your loan is going to be underwritten every step of the way and the underwriters make all the decisions. The final ok is given when the loan funds, not with the approval.

  9. Reply
    February 21, 2011 at 12:51 pm

    So you are getting an FHA loan. This type of loan doesn’t go with the regular conventional loans. It’s a government loan and it typically gets an approval 5 days after being ‘fully’ submitted.

    I’ve dealt with some FHA loans before and this consists of layered financing. If you happened to be getting more than one loan (especially if you are purchasing a home and getting 100% LTV – Loan to Value), it will require more time, since there would be several groups of Underwriters that would need to review the loan.

    The final approval however is being done by a PMI underwriter (PMI – private mortgage insurance).

    In many cases, the layered financing consists of CHDAP (California Housing Downpayment Assistance Program), CHAP (California Housing Assistance Program). The turn around times to underwrite these are 24-48 hours.

    To answer your question – what your credit history is only the first step in reviewing your loan. If you have a copy of your credit report (which you should always ask a copy from your loan officer), it would tell you if you have a good credit standing. Usually, most credit reports reflect the ‘Derogatory Items’ in your credit history first. Items like, being delinquent for 30 days or more, mortgage lates, disputed accounts, charge-offs, bankruptcy, foreclosures, lien against your property, tax liens etc….

    The next thing that will be looked upon is the Credit Score. This ranges from 300-850. You are on their good side if you have 700 or higher (usually discounts starts from 720 score – up). 620 is the danger zone and you will most likely be in the running for more documentation. Since you are getting an FHA loan, I couldn’t think of another loan that requires ‘full’ documentation as much as FHA (except for CALHFA and probably a VA loan).

    The third thing to be looked at is your trade history. Since the first one and the third one has already been reviewed by the three credit bureaus (Equifax, TransUnion and Experian), the only thing to think about is how FHA approves each loan. If their guidelines say that 620 is the minimum credit score required and that if you don’t have any mortgage lates or the likes, you shouldn’t worry too much then.

    As the person before me mentioned, income, LTV – loan to value, CLTV – combined loan to value, DTI (debt to income) ratios, PITI (Principal, Interest, Taxes and Insurance), PMI (private mortgage insurance), and reserves will be in consideration.

    An FHA loan does not get an ‘Automated’ approval. You should have received the ‘3 day docs’ by then and it will state the terms.

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