Multiple mortage applications

Asked by Hluuci, 92646 Mon Mar 9, 2009

I've just started escrow and I decided to open up 3 loan applications. One with a big bank and the other 2 with brokers. If I end up choosing one over the other 2, would I be charged a cancellation fee?? I have yet to pay any fees to the brokers but I have paid for an appraisal thru the large bank.

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7
Karen Parsons…, Agent, Laguna Beach, CA
Tue Mar 10, 2009
Hi Christyna....

I figured you had your words around backwards....I do that way too often :) and I hope I didn't step on your toes...

I have seen some pretty odd things on offers too! But I do think in this market contingencies are key...especially the appraisal. Last thing we need to do is over pay for anything!

K
0 votes
Christyna Bu…, , Fullerton, CA
Tue Mar 10, 2009
Sorry, you are absolutely correct. I worded it wrong. Although I have seen many agents miss it. My main thought was if the buyer is already in escrow the clock is ticking...
0 votes
Steven Ornel…, Agent, Fremont, CA
Tue Mar 10, 2009
Karen, I was about to say the same thing. -Steve
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Tue Mar 10, 2009
ohhh....I hate to disagree....but always have an appraisal contingency on your purchase offers. That's your protection and leverage if the property does not appraise high enough for financing. Otherwise if you get an appraisal that is too low, your deposit is at risk if you don't come up with the difference.

An example. If a home appraises at $200,000 instead of $210,000....without the appraisal contingency which states that your offer of $210,000 is contingent upon the appraisal coming in at $210,000....you would have to come up with that extra $10,000...or risk your deposit.

Important to have that security in place in this market, sometimes we are willing to pay more for a home than the bank is willing to lend.

Karen
0 votes
Christyna Bu…, , Fullerton, CA
Tue Mar 10, 2009
Hi, Hluuci,

One more thing to add on to the great advice you have already gotten. Make sure that on your purchase contract there is not an "appraisal contingency". If there is then you will only have so many days to cancel or renegotiate with the seller if the home does not appraise for the agreed purchase price.
0 votes
Steven Ornel…, Agent, Fremont, CA
Mon Mar 9, 2009
If you have not signed any paperwork that speaks to payment of fees you will not be subject to paying any fees; however, you should tell everyone that you are working with that you have two other competitors looking at rates.

Personally, I believe you are making the mistake of shopping for best rate instead of best advice.

If you are going to be "Rate Shopping" please refer to:
http://docs.Steven-Anthony.com/RateShopping-DoItRight.pdf

Good Luck,

-Steve
0 votes
Karen Parsons…, Agent, Laguna Beach, CA
Mon Mar 9, 2009
Hi,

I would double check with each lender, but normally there would not be a cancellations fee of any kind. The exception would be if each ordered an appraisal....don't let them do that. You will be charged for each appraisal. Pick your lender first, then let them order the appraisal.

Karen
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