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KS13
Life is good.
Member since 6/10 1203 total posts
Name:
K
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question for real estate agents
I mentioned this in a previous post but figured I would pose it to REs because they might have some idea:
I already got my loan commitment, which my broker said of course said was contingent upon the bank appraisal and fully signed contract (we already gave him copy of contract which had only our signatures on it- waiting for sellers which I have been told should be any day now)
Is it odd that I already got my loan commitment even though he doesn't have a fully singed contract or a bank appraisal report? Doesn't that normally come after those two things?
If so, what would be the reason for him expediting everything? He seems to want to rush everything through.
He is completely legit, I just don't understand how us closing ASAP affects him at all?
Any ideas? 
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Posted 3/24/11 5:32 PM  |
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Re: question for real estate agents
Nope, a preapproval is what you have which is better than a prequalification. They can still take the commitment away but in general it means you have your mortgage. It is a great negotiating point too.
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| Posted 3/24/11 7:32 PM |
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Re: question for real estate agents
Posted by KS13
If so, what would be the reason for him expediting everything? He seems to want to rush everything through.
He is completely legit, I just don't understand how us closing ASAP affects him at all?
Any ideas?
my guess? commi$$ion...which, he won't get the day you close usually, but the sooner you close, the faster he gets his money.
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| Posted 3/24/11 8:16 PM |
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Re: question for real estate agents
Are you sure it's a mortgage commitment and not a pre-approval letter? A pre-approval letter says you have been approved for a loan up to x amount. This can be given out even before you find a property, and usually is, so that a buyer knows how much they can afford and they are ready to make an offer when they find a house they like (and the seller can see the buyer can get the necessary financing).
For a preapproval, the mortgage lender or broker does (and should do) some due diligence re: your finances (verify income, credit, etc.), but the mortgage application (which precedes a commitment) is more extensive.
A mortgage commitment, on the other hand, is when the lender commits to giving you the loan for a particular amount on a particular house. It sets forth all of the terms of your mortgage and requires you to sign it and return it to the lender. Once you get the commitment, you have a set period of time to close (I've always seen it as 30 days).
Usually, you don't apply for the actual loan until you have an accepted offer on a house (or until contracts are fully signed). Then your application is processed, an appraiser is sent out, your file goes to an underwriter for review, etc. The last step with the bank before closing is usually the mortgage commitment.
Maybe your broker is ahead of the game and collected everything necessary for the application upfront and everything has been done/approved, pending the appraisal. I think that is a good thing -- usually it is to everyone's benefit (including the buyers') to be ready to close asap. The only thing I could see being an issue is if the broker pushed you to apply for the loan before contracts were signed, and there were non-refundable fees involved (so that if the sellers didn't sign, you would be out money on your mortgage app). But it doesn't sound like that's the case here.
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| Posted 3/24/11 11:23 PM |
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KS13
Life is good.
Member since 6/10 1203 total posts
Name:
K
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Re: question for real estate agents
Posted by Century 21 Dallow - Christine Braun
Are you sure it's a mortgage commitment and not a pre-approval letter? A pre-approval letter says you have been approved for a loan up to x amount. This can be given out even before you find a property, and usually is, so that a buyer knows how much they can afford and they are ready to make an offer when they find a house they like (and the seller can see the buyer can get the necessary financing).
For a preapproval, the mortgage lender or broker does (and should do) some due diligence re: your finances (verify income, credit, etc.), but the mortgage application (which precedes a commitment) is more extensive.
A mortgage commitment, on the other hand, is when the lender commits to giving you the loan for a particular amount on a particular house. It sets forth all of the terms of your mortgage and requires you to sign it and return it to the lender. Once you get the commitment, you have a set period of time to close (I've always seen it as 30 days).
Usually, you don't apply for the actual loan until you have an accepted offer on a house (or until contracts are fully signed). Then your application is processed, an appraiser is sent out, your file goes to an underwriter for review, etc. The last step with the bank before closing is usually the mortgage commitment.
Maybe your broker is ahead of the game and collected everything necessary for the application upfront and everything has been done/approved, pending the appraisal. I think that is a good thing -- usually it is to everyone's benefit (including the buyers') to be ready to close asap. The only thing I could see being an issue is if the broker pushed you to apply for the loan before contracts were signed, and there were non-refundable fees involved (so that if the sellers didn't sign, you would be out money on your mortgage app). But it doesn't sound like that's the case here.
Yes its def the loan commitment. I think he had everything he needed from us. We already submitted all the paperwork for the application, we charged the application fee and so he was able to get the loan approved contingent upon the appraisal which is contingent upon the completed signed contracts (which my atty stated hopefully we will have by early next week- they had to get three signatures, one of which was in a different part of country).
Ok- so basically its a good thing that we already have the loan approval and it just means perhaps he wants us to close quick so he can get his money quick- is what I am getting...
Thank you all for answering!!! 
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| Posted 3/25/11 10:23 AM |
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Re: question for real estate agents
the banks that I deal with....Continental and Wells Fargo mainly you can't get the apprasial with out the contract
and you can't go into underwriting with out the apprasial
however I have a deal going with an independent lender and he got my buyers a commitment with out the apprasial- but we had a contract
part of the approval in underwriting has to do with the apprasial
so you are going to have to go back to underwriting
it's not commmon to do things this way-it's actually more work for the underwriter
since the fees are not-refunable - I have to say I don't see this as a good thing-
they could get another offer and take it-they could change their mind
1 of the sellers could hold the whole thing up
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| Posted 3/25/11 11:51 AM |
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KS13
Life is good.
Member since 6/10 1203 total posts
Name:
K
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Re: question for real estate agents
Posted by Beth EXIT Realty
the banks that I deal with....Continental and Wells Fargo mainly you can't get the apprasial with out the contract
and you can't go into underwriting with out the apprasial
however I have a deal going with an independent lender and he got my buyers a commitment with out the apprasial- but we had a contract
part of the approval in underwriting has to do with the apprasial
so you are going to have to go back to underwriting
it's not commmon to do things this way-it's actually more work for the underwriter
since the fees are not-refunable - I have to say I don't see this as a good thing-
they could get another offer and take it-they could change their mind
1 of the sellers could hold the whole thing up
Ok- so if the third seller (the one that has had the contract for a week now) doesn't sign the contract and they get another offer for more money- then they can back out and now we are out of the money that we paid the bank for the loan application?
Message edited 3/25/2011 11:55:29 AM.
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| Posted 3/25/11 11:55 AM |
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Re: question for real estate agents
Posted by KS13
Ok- so if the third seller (the one that has had the contract for a week now) doesn't sign the contract and they get another offer for more money- then they can back out and now we are out of the money that we paid the bank for the loan application?
the fees are normally non-refundable- I would fight them- but yes that can happen
what happens if the house doesn't appraise? have you asked him why he did things this way?
an aprasial and a mortgage commitment take less then a week at most banks- so why the rush? esp with out of state sellers- they might need time on their end to close
I have houses I have had commitments on for 3 weeks that the sellers aren't ready to close on....there isn't anything I can do to get paid faster
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| Posted 3/25/11 12:08 PM |
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KS13
Life is good.
Member since 6/10 1203 total posts
Name:
K
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Re: question for real estate agents
Posted by Beth EXIT Realty
Posted by KS13
Ok- so if the third seller (the one that has had the contract for a week now) doesn't sign the contract and they get another offer for more money- then they can back out and now we are out of the money that we paid the bank for the loan application?
the fees are normally non-refundable- I would fight them- but yes that can happen
what happens if the house doesn't appraise? have you asked him why he did things this way?
an aprasial and a mortgage commitment take less then a week at most banks- so why the rush? esp with out of state sellers- they might need time on their end to close
I have houses I have had commitments on for 3 weeks that the sellers aren't ready to close on....there isn't anything I can do to get paid faster
Thats why I asked..I thought it was a pretty strange that our broker was in such a rush. It all seemed very out of sequence and odd. Maybe I should ask..
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| Posted 3/25/11 12:13 PM |
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Re: question for real estate agents
you should definately ask!
anytime something doesn't sit right with you during this process SPEAK UP
these people work for you!
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| Posted 3/25/11 12:19 PM |
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