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do i have to go with the lender i get prequalified with?

Can I start the process of buying a home with one lender who pre-approved me and change lenders when I find a home?
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July 25 2010 - South Valley
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You can "fire" the lender, but realize that it may delay the closing or even cancel the sale of a specific property, depending on the wording of the purchase contract. If you've got a "border line" pre-approval -- think carefully. Will another lender pre-approve you?

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July 27 2010
You do not have to stay with the lender you get preapproved with.  I always give my buyers 3 different lenders to choose from and I always give them a quick description of all three.  I tell them to call all three and see who they feel the most comfortable with. 
I have had a few buyers change lenders after getting preapproved.  There is nothing wrong with that, but I would check with the lender to see if it will effect your credit report.  I know there is a time limit that it will not effect, but I would double check to be sure.

Thanks

Jaime in Syracuse
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July 26 2010

No you don't have to go with the lender who pre qualified you. You can interview with several lenders. Go with who you feel the most comfortable with and whose fees are reasonable. Hints: You can get your credit pulled 4 times by lenders within 30 days before your score takes a little ding. It's also best to stay away from the big banks right now. They seem intent on slamming you down at a 35% debt to income ratio..which means your pre approval amount you can go shopping for is going to be much lower than you would like. If you see a credit union, their rules are much more lax. They do not have to subscribe to the same rules and guidelines the big banks have to follow. Credit unions also deal with subprime scores and are more willing to lend you money for auto loans, and home loans. And the best tip of all is to find a mortgage broker who is the CEO of the company. They can get you pre approved usually better than anyone else. When you walk into a bank, you are dealing with a loan officer or branch manager who has no authority to open up your debt to income ratio. They have to get permission from their higher ups. A CEO does NOT have to get permission from higher ups. They ARE the last word and know options on how to get your approval amount boosted to a higher amount. This is true.  Check it out... Shy [contact info removed by moderator]

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July 26 2010
Profile picture for Pasadenan
"Multiple pulling of credit scores by different potential creditors can lead to a reduction of credit score" -

Multiple "pulls" within the 30 days only counts as "1" for all three credit reporting agencies.  That is not the issue.

Yes, get multiple letters of "pre-approval"; but only get an appraisal from one, and only do an application with one.  Otherwise, you are delaying your closing and running up your costs.

If you are making an offer on a "short sale"; find out who the lender is holding the note and get a pre-approval letter from them.  It will improve your chances.
 
Also, have the pre-approval letters customize to indicate only what you plan to offer.  You do not want the seller nor the listing agent knowing what your limit is as that weakens your negotiating position.

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July 25 2010
Also Sparkee be sure to get your hands on a copy of that credit report.  Some lenders do share the same platform and will allow you to import a credit report from another lender to there bank as long as the credit was pulled in the last 30 days.  But of course you need to have the credit report information. 

Also with FHA loans you are assigned an FHA number and if you are working with a Mortgage Broker it will allow them to shop the loan around without multiple request for credit.  This is one of the benefits to working with a broker over a bank.  You are not locked into the terms of one bank. Of course the Broker will charge you additional fees which will increase the pricing of the loan.
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July 25 2010
Yes, you can start the process with one lender and change lenders, but there may consequences to that change.  Settle with one bank of your choice and if you are offered better terms by another, ask the original lender to negotiate the terms you were offered.  Other responders have shared with you the issues related to multiple requests for credit scores.
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July 25 2010
Hello Michael:

If you advise a client to accept your free country philosophy without advising them of the consequence to having different lenders pull their credit then you are not giving Sparkee enough information to make a decent choice. 
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July 25 2010
Yes but be careful in doing that.  Since your credit score was pulled by the first lender to issue you a pre-qual your credit score will have to be polled again if you decide to change lenders.  Multiple pulling of credit scores by different potential creditors can lead to a reduction of credit score.  Any reduction in your score can affect the banks decision to lend. 

As well most lenders will pull your credit score again the last few days before the loan closes.  This is to ensure that no new derogatory information has affected your score.  If they see a lowering in your score before the loan closes due to multiple request they may just decline your loan even if you decide to close with bank no 1.

If the terms are not to your liking then I would suggest you renegotiate them with the bank.

Good Luck
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July 25 2010
no you do not!

believe it or not you live in a free country.  Some Realtors add to their MLS instructions that a buyer must be pre-qualified with xyz bank or mortgage company,   this practice smacks of RESPA violations.

Get prequalified with your choice of bank,  if listing realtor forces you to qualify with his "friend",  do so,   once u receive the pre-qual letter from his "friend"  and your purchase agreement is accepted,   use your own guy and tell that realtor to bite it!

just my humble opinion
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July 25 2010
 
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do i have to go with the lender i get prequalified with?
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