Home Buying in 94133>Question Details

Resilientmon…, Other/Just Looking in San Francisco, CA

How many lenders do you recommend approaching? How long are pre-approvals valid? Thanks

Asked by Resilientmonkey, San Francisco, CA Sun May 15, 2011

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Dear Resilient -

I recommend that you work with the lender that your realtor recommends to you. If you have a good agent, you will end up working with an honest, experienced, and efficient lender.

It’s a group effort to make a real estate deal close well and it’s best to have a cohesive team who has experience with each other. The lender values your realtor’s referrals. The realtor does not benefit from referring you, other than the peace of mind that you and the deal are in good hands. If you have a lender already chosen, one of the first things a realtor will want to do is talk to the person to make sure they are buttoned up. Even if you are working with a large well-established bank, in the end, it's a single person who is going to take you across the finish line

Perhaps you are attracted by an incrementally lower rate you find on the Internet. Be concerned. At the 11th hour you might find that the lender can’t meet the purchase contract deadlines or somehow your approval falls apart. There are a lot of lenders who over promise and under deliver. They can be inexperienced and/or unfamiliar with San Francisco real estate. They may not be vested in our community and not care so much if the deal falls apart. In the most important transaction you will ever make – it’s not the time to work with unproven people.

Also, if you do start talking to a number of lenders, don’t allow them all to pull your credit report, which is one of the first things they will want to do. Each time that happens it has a negative effect on your credit score.

Pre-approvals should be good indefinitely with periodic updating of supporting documentation or unless rates change significantly. Your agent can help you stay on top of it.

My final advice - consult your realtor! If I can be of any help, let me know.

Kim Barnes, Realtor, A Top Producer
Hill & Co Real Estate
415-730-2593 Cell
415 935-1546 Google Voice
415-202-2432 Fax
www. kimbarnes.net
0 votes Thank Flag Link Sun May 15, 2011
I agree with the others 60-90 days. As for how many to shop, I found excellent advice in this woman's book http://www.askcarolynwarren.com (now a bit dated, but still a good read) it is called "Mortgage Ripoffs and Money Savers". She recommended calling 2 direct lenders and 1 mortgage broker.

My advice is to just call one right now - get your pre-approval, and start house hunting. When you find a home you want to offer on, get an updated pre-approval from that one lender to present with your offer. Once in contract, then call as many lenders and mortgage brokers as you feel is needed until you find the lender with the best rates, best program, and who gives you the most confidence. Of course I do 100% agree with Kim's advice that your Realtor should have a lender (or 3 as Lance suggests) who are likely to be that person - and it is ideal when that happens because as Kim points out, this requires team work and communication, and transactions can blow up when a lender drops the ball. We Realtors have spent time weeding out the bad ones, and only working with the ones we know will get the job done.

But because loans do still blow up, if you have ANY concern that might happen, I recommend you take the precaution of doing two loan applications with different lenders. If one blows up, you have the other to fall back on. This will cost you extra money because you will likely have to pay out of pocket for the appraisal you don't use, and there may be an application or credit fee. And I recommend that you make both lenders aware that you are doing two applications so there are no surprises at the end. It isn't fun to do all that work and not get the business, but so many loans blow up these days that didn't happen a few years ago, that steps like these are often becoming necessities.

Good lcuk!!!
Web Reference: http://www.SFisHOME.com
1 vote Thank Flag Link Mon May 16, 2011
Thank you for all of your responses.
0 votes Thank Flag Link Wed May 18, 2011
Pre-approvals from a lending standpoint are usually good for about 90 days. However, when making offers and attaching your pre-approval letter most sellers (especially owning banks of REO properties) want to see a very recent pre-approval. You can typically obtain updated approval letters from your lender as needed.

As far as how many lenders to talk wtih.... I suggest working with one lender that you feel is a best fit and that you like. Build a relationship and a basis of trust. And ask your agent to provide honest feedback on their service and knowledge base as they interact with them (your agent has a fiduciary responsibility to watch out for your best interest). Now, having said all that, I also recommend have one or two back ups that provide a specific expertise such as a lender that specializes in renovation loans in the case you find a property that is a little more than a cosmetic fixer. Your agent should have alternate lenders to suggest in the case that the lender you are working with can't close but possibly someone else can with access to different programs.

I hope that helps!

Tara Steinke
Broker - Solant Real Estate Advisors
0 votes Thank Flag Link Tue May 17, 2011
Most preapprovals are good for 90 days. I would recommend speaking with a two local lenders who know your market place.
0 votes Thank Flag Link Mon May 16, 2011

Pre-approvals are typically good for 60-90 days. We refer our buyer clients to three lenders, each of whom have different products. We recommend clients discuss their situation with each of them to find out who has the best program for them.

Working with a lender referred by us assures them great service - whoever your agent/broker is, ask them for a recommendation. You should get better treatment than going in as a one-off.

Best Regards,

Lance King/Owner-Managing Broker
DRE# 01384425
0 votes Thank Flag Link Mon May 16, 2011
Dear Resilie:

(Thought that'd be a good truncation of your name). Keep in mind that every time you get pre-approved that your credit report is is accessed from what I understand. That said, if you're deciding between a TIC or a Condo for example, or conventional vs. jumbo, etc. it may be best to approach a mortgage broker because they will be able to shop the market for the best product for you while only accessing your financial information 1x.

Besides, if you think about it, a banker rep may only know their products and won't have a vested interest in getting you the best product out there, which may not be purely based on APR as other factors like points, early pay-off, etc. may affect your particular situation. Mortgage brokers, by contrast, are paid to shop around and, I've found, are more likely to get back to you sooner and are the ones who are willing to the extra mile you may need when navigating SF's markets. Most important, you should feel comfortable with who you pick!

I have a bevy of contacts for various types of personalities and situations, so please contact me if you wish.

Hope that helped!


Kevin Ho
0 votes Thank Flag Link Sun May 15, 2011

Typically, a pre-approval is good for up to three months. However, in the event of any changes, such as a pay cut or new credit accounts (ex. car loan, new credit card), you should notify your loan officer. This may have an impact on your pre-approval, especially if the new debt and loss in income increases your qualifying debt-to-income ratio.

Every agent is different, but the agents I work with typically refer their potential clients to three lenders. That way, they are covering themselves by referring multiple loan officers in the event that one loan officer drops the ball in the last minute of a transaction and you've had a chance to shop the rates available at different lenders and determine who has the best service, interest rates, etc.

Happy house hunting, if I can be of assistance, please let me know.

Michael Abram
First Capital Mortgage
NMLS #235060
Direct: (310) 434-1718
0 votes Thank Flag Link Sun May 15, 2011
I too would recommend you speak to a couple of lenders but I also recommend you speak with a mortgage broker as well. A good mortgage broker will help you sort through all of the different programs out there and will help you narrow down the best loan for you.

Pre approvals are generally good for 90 days as long as there are no major changes in your financial or job situation. I have some very good lenders and mortgage brokers I work with, feel free to send me an email if you would like any referrals.

Dan Dodd
Coldwell Banker
0 votes Thank Flag Link Sun May 15, 2011
I would speak with at least a couple of lender to see what they have to offer. Depending on your financial situation, lenders may offer different options.

Oggi Kashi
Paragon Real Estate Group
Web Reference: http://www.oggikashi.com/
0 votes Thank Flag Link Sun May 15, 2011
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