Buying a home is a big decision and can sometimes seem overwhelming, but just remember that as a buyer you have control. When you go to the store to buy a new mobile device, you expect you to leave the store without thinking about buying. The same goes for your new home and it’s a much larger purchase than an iPhone! At the end of the day, you want to leave the closing table without regrets, and finding the right quick mortgage lender is a big part of this equation. Can you switch mortgage lenders before closing?
Common reasons why buyers change mortgage lenders
There are hundreds of reasons why home buyers may be interested in finding a new mortgage lender during the purchase process. Here are some of the most common:
Lower interest rates by another lender will save the buyer thousands of dollars throughout the loan period. In most of these cases, switching to a lender with a lower rate is not a problem for the home buyer.
Delayed formalities are a common problem for some loan companies. Unfortunately, this is one of the main reasons why most people change lenders. The average lender’s working time for a loan is between 40 and 60 days, which seems like a long time. When delays further accelerate this process, many home buyers are really frustrated. In addition, a lot can change in 60 days. For example, rates can increase or decrease significantly during this time. So finding a loan company that can help you close your home quickly is very beneficial.
Some mortgage lenders are doing more for their clients. Maybe you’ll find a new lender who is doing his best to find lower rates or lower other fees associated with the home buying process. It is very likely that finding such a lender will encourage some people to switch to a new lender.
Fees can be a heavy burden during this process. Some lenders will require additional fees and include a number of additional loan terms. For many home buyers, these things can be a big deal. Nobody wants to feel cheated, especially when they get a big loan.
Disadvantages of switching
Changing mortgage lenders has its drawbacks. One of them is delays. With a new lender you need to start from the first in your application. This means re-submitting documents, taking out a loan and meeting all other loan conditions granted by the lender. Closing usually takes 30 to 45 days from start to finish, so it can extend a month or even more on the timeline of buying a home.
Carefully choosing a lender
Despite these consequences, it is still worth paying for the switch of mortgage lenders. But remember to choose a new lender wisely. Look for the best rates and compare them with customer service, closing costs and additional fees.
After selecting a new lender, provide details of the new loan to all important parties, including the agent, seller, deposit agent and other entities. You will probably need to add an addition to the sales contract to consolidate the change.