If my in-house financing company has dropped the ball on pre-approval after telling me I was pre-approved.....

Question

Our in house financing has preapproved us for a loan and told us not to worry everything was taken care of, but now they have requested updated information on our income because they didn't really pre-approve us for the purchase price of the home. We added upgrades to the house which increased the loan amount, when we discussed the issue with the loan officer she just blew us off and never sent another good faith estimate with the new pricing. Now we have 3wks to closing and we are having to lock our rate at something much higher than we expected because the underwritting wasn't approved yet. Do we have any bargaining power against them for dropping the ball per say? We feel as though we might not be able to afford the monthly note now , because of their inadequicies. And finding outside financing at this point willl probably lower the credit score and penalize us all together! Please help we dont know how far we can push them and still get this home.

Answer 1

By 'in house financing', I assume you mean the builder/developer has its own loan brokerage division. If this is the case, you can probably put pressure on one or both divisions to capitulate a bit. Perhaps the loan origination fees can be reduced, or the builder section will cut some money off of the cost of the upgrades. However, if both sides hold firm and refuse, you're stuck taking what they are offering, or walking away. The loan officer was apparently less than cooperative and not really 'on the ball'. However, it is possible that underwriting had you close to the limit you qualified for initially, and your 'upgrades' shoved you over the limit. Underwriting isn't always the fastest turtle in the race to respond either.

Answer 2

Pre-approvals are a starting point for buying a home - not the final decision on the loan.

Did your "upgrades" go over the original pre-approval amount? If so, then you basically voided that agreement.

It's normal that only after a formal application is being processed, that all assets/debt documentation is filed. Pay stubs, exact outstanding credit card bills, etc.. are rarely processed for the pre-approval.

Do you have a second lender that you have discussed a potential loan with? Remember, the original loan you buy the home with, will be sold by the mortgage company and you will end up with someone else as your mortgage holder. So there is no such thing as brand loyalty in mortgage loans. Go find someone who will help you...

Answer 3

Real quick - pre approval does not mean rate lock. You need to request the lock. Also your preapproval was based upon the loan amount you initially agreed upon - not more. It sounds like you raised the loan amount and that would require another approval. I do not know the details of your loan but most loans have some "wiggle" room for a higher loan amount.

Requesting updated income info is very common. Paystubs and bank statements are only good for 30 days. You appear to have gone beyond that window.

Rates have gone up dramatically since May 1 (they were at 5.875%/30-yr fixed - today it is up to 6.625%). Go to your current loan officer immediately and get reapproved at the higher amount - and lock you rate!!!

Answer 4

why do you want to do a loan with someone that blows you off? the thing with pre-approvals is that they arent worth the paper they are written on. some loan officers know what they are doing, and some just want you to do business with them whether they close it or not. my suggestion is to start a loan with someone else. let someone take a fresh look and give you a REAL estimate of what loan you qualify for. I can typically fund a loan in less than 21 day... there is still time. I can double check their work for free if nothing else.

I have access to 130+ lenders, and every program imaginable. i am sure i can find something to suit what you are looking for, with the right payments.

I am a sales manager for a mortgage company approved in all 50 states. 95% of our business is purchases referred to us by agents because of our track record. go to my profile and email me. I will be glad to help where someone else has dropped the ball. and at least you will be doing business with someone who will pick up the phone when you call.

Answer 5

I see that you are in a difficult situation. If you are still seeking financing please email me at [e-mail]. I work for a nationwide mortgage banker and direct lender. I deal directly with wall street investors so I would be able to get your loan done quickly and effectively. Everything that we do is in-house ,.e.g. processing, underwriting, loan origination. We don't have a lot of fees. Email me (Bert Dixon) and I will give you my contact info and help you with your loan further.

Answer 6

When in doubt, go up the chain. Get management involved. Push like heck.