Most likely it is initial loan application that need to be filled out. I would have to question why this is being handled by your Realtor and not the mortgage professional. This is perfectly normal and in order to prequalified you need to start the process before a house is selected.
I would also agree more than likely a "kick back" is not involved. Most likely your Realtor has a good working relationship (pretty darn good since he is having you sign the loan paperwork) with a lender.
I would caution you on how many times you give your information (social security number, date of birth, and so on). Not all mortgage professionals are alike. Too many pulls on your credit could affect your score.
On a final note.. If you are not comfortable with the agent you feel you are "stuck with", I am not sure you want to start a relationship with their lender. That is just me! Buying a home should be a good experience and it sounds to me that you might not think your current Realtor is a good fit. If that is the case... it is OK to maybe look at other options.
Loan Industry and Real Estate people define loan documents as the papers that a borrower signs at the escrow company the day before or a few days before the close of escrow.
A consumer that writes that they are being asked to sign loan "documents" is probably referring to a lengthy set of loan application papers. In the days of full disclosure and full documentation this set of loan application papers frequently ran to 20 pages. From memory these were the FNMA 1003 - 5 pages, an affiliated business disclosure 2 pages, requests for verification for employment, deposit verifications, rent or previous mortgage verification requests, authorizations to disclose information, serivcing transfer disclosure, sale of loan disclosure, etc.
These forms are part of the initial application package, they are not final loan documents.
Most sellers these days will not look at an offer without a pre approval. I infer from your question that you do not trust your agent. You wrote that you assume that he is getting a kickback from his loan broker. That is legal only if he discloses compensation from the loan broker through an affiliated business disclosure. Did he disclose that to you?
My answer to your question is: It is proper and normal for an agent to help his buyer obtain loan approval.
It is proper for the agent to receive additional compensation for the loan if he discloses that he will be compensated for doing so, and using the proper paperwork to make that disclosure.
Its your money so it should be your choice of lender. You should not "have" to use the lender your Realtor suggested. Talk to your current bak, they may offer you a better rate as an incentive to keep all of your business. Secondly, if you don't like or trust the Realtor you most likely have the recourse to let him go and find someone you can work with. Read your copy of your Buyers Representation Agreement and verify the details. In Texas you can fire a Realtor for any reason or no reason. I wish you the best of luck with your purchase!
This is not technically true, signing the GFE is acknowledging receipt of the disclosure. The GFE is therefore not legally binding upon the borrower.
Perhaps waiting for common sense is referencing a loan salesman who refers back to the GFE to remind the borrower that he knew what he was getting into when he started. But it is not legally binding on the borrower
Your not stuck with either a real estate agent or a mortgage professional! The only way this can be possible is if you have an exclusive buyers broker agreement in which the agent will be representing you and looking after your interest. In the mortgage professional scenario you would have had to pay an origination fee this is how sometimes they trap you every bank has their normal fees so this is something you should look into find out what these fee's are most of these fee's are already on the GFE.
To answer the rest of your question its not normal to for them to push for a full application with out you finding a house or having a contract in place. What is normal is for them to ask you question such as your SS# for the credit check, how much down payment you have (this is how they get the LTV ) how much your earn any assets and this helps them give you a pre-approval. Based on these questions they will also determine what kind of program you fit in. In todays world or mortgages they are requesting more paper work or documentation in what they call full documentation loan so be prepared.
Last if you don't trust your agent or mortgage professional get a new one our business is based on trust and rapport some real state agents can do both services they just have to disclose this to you. So I hope I answered your question.
I assume you asked your agent why he is suggesting that course of action. What was the response? If you haven't asked, you should.
If he's suggesting you use a particular lender or mortgage broker, the most likely reason isn't kickbacks, but rather that the agent has experience with the lender and knows the lender is good at getting applications approved. Yes, the agent does have a major incentive...but it's not a kickback, it's the commission from the transaction. So the agent doesn't want to risk that by having you go to an untried lender, or selecting some lender online that no one's ever heard of. Still, you have the right to use anyone you choose. Ask your agent for additional recommendations. Or ask your agent about the lenders from whom you've received GFEs.
And, finally, if you're still not comfortable with your agent after going through the above steps, then you might be better off considering another agent.
Hope that helps.
Something smells fishy. I have never known a lender to draw docs without a signed contract. I don't know how they could without an address. I certainly wouldn't sign them.
Good luck, Walter