Home Buying in Los Angeles>Question Details

Jason, Home Buyer in Los Angeles, CA

One purchase, two loans, two appraisals?

Asked by Jason, Los Angeles, CA Sun Nov 14, 2010


It is a good idea to get two loans (one as a backup) and do two appraisals for a single home purchase? If the first loan is successful and the buyer cancels the backup loan, will the buyer be charged with any fees from the lender except the appraisal? Is this a good plan to counter a 35 days escrow and no appraisal contingency contract?

Thanks in advance

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Since you will need to disclose and approved by both loans, I don't see why a second appraisal is necessary. I would recommend Bruce Nangle at First Capital Mortgage to help you.
0 votes Thank Flag Link Sat Mar 10, 2012
As a buyer, why would you agree to a contract with no appraisal contingency? Who is giving you that advice? That flawed strategy then leads to your the deceptive tactic of having two lenders work diligently on your behalf to get you a good loan without knowing that one of them is working without compensation. Even if you pay for an extra appraisal, the money goes to the appraiser and his management company. The lender gets bupkis! Would you have two Realtors write offers on the same property, wait and see which one was accepted and then tell the other Realtor “thanks for your time and effort”?
0 votes Thank Flag Link Sun Nov 14, 2010
That sounds to me like a lot of work, quite honestly I don't see the reason to spend extra money on an additional appraisal. If you are dealing with one lender you should be able to ask for what you want from the very begining. Good luck!!!
0 votes Thank Flag Link Sun Nov 14, 2010
That is an awful idea and a lot of work, getting prequailified prior to making any offers, taking teh extra stepo to get preapproved will lead to an easier process for you. Submit your last 2 years tax returns, last 2 paystubs, 3 months bank statements and list if incime and expenses. Shop around first, dont wait until you find a house to do your shopping around.

Please see my blog with advice and tips on getting a loan in todays market
0 votes Thank Flag Link Sun Nov 14, 2010
Hi Jason,

Great question. I don't see a reason to put no appraisal contingency into the contract, especially if the value comes in under your purchase price and opens up room for re-negotiations - You could then have the price lowered. If you're concerned about the property appraising or that one of the lenders will come through for you, having two lenders may be a good option to consider. Keep in mind that this will be considerable work for both of the lenders, one of which will not be getting the business, so I recommend to be as up front and accomodating as possible to both lenders if you choose this route.

If you need any help or suggestions of a couple great lenders I would highly recommend let me know.

Best Regards,

Grant Linscott
Keller Williams Realty
cell 323.333.6222
0 votes Thank Flag Link Sun Nov 14, 2010

There are a few problems with your idea. First one is that you will have a problem finding a lender to work for you in a back up position to another lender. It just makes no sense. We also have pull through ratios with our investors we must adhere to.

What is your issue that would make you think you need two lenders. If our primary lender turns you down, we would simply transfer your appraisal to a different lender. its not an issue any more as HVCC appraisals are portable.

It would be if you chose a big bank though. Just pick a broker with plenty of experience and you should not have as issue

Don Maher
20 year mortgage broker
United Capital Mortgage
Web Reference: http://www.donmaher.com
0 votes Thank Flag Link Sun Nov 14, 2010
Completing two loan apps is a fair amount of work and a couple hundred dollars in fees so unless there is some strong reason I don't think you need it - like you're self employed,... If you are W2, decent credit score, down payment then do 1 app with a direct lender, have your paperwork all ready and have your realtor stay on top of things. During the insepection period you can safely cancel so get the appraisal and inspection done quickly so you'll know if it appraises high enough..You should be fine with 35 days..
0 votes Thank Flag Link Sun Nov 14, 2010
Hi Jason,
It's always a good idea to have a back-up loan, especially from a recommended lender that your agent has completed many successful transactions with. If you go the full course with both lenders, then you will have to pay for 2 separate appraisals, but consider the extra cost as an insurance premium. (I've even had buyers who have signed loan docs w/ each lender b4 deciding on which one to use.) You must ask each lender if any addt'l costs will incur (ie) application fee, credit check, etc. I have a wonderful loan officer w/ a direct lender who backs-up all of my buyers at no additional cost (except the appraisal fee):
Steve Masuta / Propsect Mortgage / (818) 742-3217 / smasuta@prospectmtg.com
The length of escrow is an item to be negotiated b/w you and the seller and most DIRECT LENDERS can close loans b/w 30-45 days (depending on the type of loan). I never advise my clients to waive their appraisal contingency, esp in this market.
Good Luck!
p.310.383.1141 | http://www.LAVillageRealty.com
RealEstateSuz@gmail.com | lic # 01390707
(a division of Power Brokers Int'l | lic # 01520327)
0 votes Thank Flag Link Sun Nov 14, 2010
If you accept an offer with No appraisal contingency & the buyer is obtaining financing they WILL still need to get an appraisal ordered.

A buyer CAN shop around for a mortgage, whichever company is offering the best terms & interest rate, but it is not necessary for a buyer to order 2 appraisals.

It is Highly unlikely in this market that a buyer is ultimately going to shell out cash to pay MORE than the appraised value.

If I didn't quite answer your question, feel free to shoot me an email directly, I won't look for answers on Trulia regarding this question.

562-430-3053 cell
0 votes Thank Flag Link Sun Nov 14, 2010
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