Lender Not Required to Provide GFE until Borrower Under Contract
The new regulations do not require the lender to generate a GFE or hold the lender to their fees until the borrower is under contract with a property. This means that you can’t realistically shop between lenders until you are under the time constraints of a purchase contract. Waiting until you are under contract to stop start shopping for your loan and then beginning the loan approval process is going to make it very difficult to close your transaction in a timely manner.
What Happens if I Don’t Have Loan Approval?
Worst case if you don’t have loan approval before your financing contingency is up (typically 14 to 17 days after you go into contract) you could very well lose the home of your dreams and could also lose your earnest money in the process.
How Can You Avoid Problems with Financing?
To avoid all of this hassle, my advice is to work with somebody you can trust, have confidence in and is there to be a true advocate to you. Even before the new regulations were in place, I have always provided my clients with an accurate estimate of closing costs and the funds needed to close their transactions at the very beginning of the loan process. I do not wait until you are under contract, as I think you need to have a clear understanding of how much it is going to take to close the transaction before you start submitting offers. If it is important to understand how much it is going to cost you to buy a home, ask your Mortgage Advisor to provide you with the breakdown of the costs before you start looking for a San Mateo home.
Want a Second Opinion?
I’d be happy to take a second look at your loan or Good Faith Estimate issued by another lender, free of charge. I can help you determine whether this is the best loan program for you and if you are getting the best mortgage interest rate.
If you’re in good hands…we’ll tell you! If there’s something you should be concerned about, we’ll tell you that too! Then, you decide what the best course of action is. Call me at (650) 520-0915 or email me at info@SanMateoMortgageBlog.com to schedule a no obligation consultation.
Will Big Banks Stop Issuing Pre-Approvals?
The new regulations have definitely turned the loan process upside down for most lenders. So much so that I’ve heard some big time lenders may to stop issuing genuine pre-approvals to borrowers before they look for a home! Tune in next time to learn the importance of getting a pre-approval before you start shopping for a home and why some lenders may stop issuing this service.
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