Switching Lenders During The Mortgage Process Borrowers

This Article On Switching Lenders During The Mortgage Process For Borrowers Was PUBLISHED On July 9th, 2019

It is very common for borrowers to switch lenders once the mortgage process started. 

• Roughly 75% of the Gustan ChoAssociates’ clients have changed lenders during the mortgage process
• Whether you receive your last second denial, or we’re not getting the customer service you deserve or are simply shopping for a mortgage, it is very common to switching lenders
• In this blog, we will detail the best practices for switching lenders
• Many clients are preapproved when they truly do not qualify
• Once they put a contract on a house they are then denied by underwriting
• Many times this is due to LENDER OVERLAYS
• If that is the case, we encourage you to transfer your loan file to Gustan Cho Associates

In this article, we will discuss switching lenders during the mortgage process and how to begin this process below.

Switching Lenders And How To Start Process

When you have finally made the decision to give up on your current lender, there are important steps to follow.

• You will want to contact Mike Gracz on (800) 900-8569 or text us for faster response
• Or email gcho@gustancho.comfor an initial consultation
• You will have a brief discussion with Mike to know what your best options are
• Either Mike or one of the highly skilled loan officers at Gustan Cho Associates Mortgage Group will assist you with the mortgage process

Gustan Cho Associates at NEXA Mortgage, LLC are direct lenders without any LENDER OVERLAYS on all conventional, FHA, VA, and USDA mortgages.

Switching Lenders To A Direct Lender With No Lender Overlays

We even offer many NON-QM mortgage options!

• Unfortunately, we receive daily phone calls from clients who are pre-approved with a current lender and eventually get tonight through underwriting
• Many times, your current loan officer is to they should not have pre-approved you, to begin with
• Other times you are running into a lender overlay
• A lender overlay is simply an additional guideline added by a specific bank to minimize risk on a loan
• Below is an example of an AUS findings report for an FHA loan called FHA TOTAL SCORECARD

A few common overlays our debt-to-income caps, credit score restrictions on gift funds, requiring charged-off accounts to be paid. Please see HUD’S WEBPAGE ON TOTAL SCORECARD for more information.

As stated above, we do not have any lender overlays. We go directly off Fannie Mae, Freddie Mac, FHA, and VA guidelines without anything additional. 

Options For Borrowers Who Get Denied For Mortgage By A Lender

Contact us at Gustan Cho Associates and go over your specific hiccups.

• There are very few situations that we have not come across before
• We are a highly trained mortgage team who has dealt with many sticky situations
• After your initial consultation, you will be paired up with a licensed loan officer in your state
• From there you will send the documentation required for your loan product (the same information you sent your current lender) and fill out an application link so we can start your loan file at Gustan Cho Associates
• Your loan officer will go over your credit report with you to make sure there are no discrepancies and then work on your pre-approval
• Assuming we can get you pre-qualified, we will get your loan back on track as soon as possible, we have closed loans in as little as nine days! 
• If for some reason we need to work on your credit, we will put you on a fully customized financial plan to qualify as soon as possible
• We work with many families for well over six months before they qualify for the home of their dreams
• It is important to be 100% open and honest with your loan officer, we are all on the same team
• Especially if you were turned down by another lender, honest communication is key

We work long hard hours to make sure your file gets completed in a timely fashion to minimize any added costs associated with extending a real estate contract. 

Do I Need To Order New Appraisal When Switching Lenders?

Depending on the loan product, there are cases where your current appraisal can be used, and you do not have to pay for a second appraisal. Below we will detail the appraisal policy at for each mortgage loan programs:

Conventional Appraisal Mortgage Guidelines:

• At this time, Fannie Mae and Freddie Mac do not allow for transfer to appraisals
• Meaning if you have already paid and completed a conventional appraisal and are switching lenders, you will need to pay for another appraisal

FHA Appraisal Transfer Guidelines:

• An FHA appraisal is attached to the specific address and FHA case number
• That may sound complicated, but the good news is you can transfer FHA appraisal from lender to lender
• If you have been turned down late in the process and already have an appraisal completed, you simply need to write your lender
• They will transfer the FHA case number and appraisal to your new lender! 

VA Appraisal Transfer Guidelines:

• Just like FHA above, a VA appraisal may also be transferred from lender to lender
• The process is the same, you will alert your current lender and let them know you are switching lenders and they will transfer the appraisal to the next mortgage company

NON-QM Appraisal Guidelines:

• When utilizing a NON-QM mortgage product, many times a current appraisal maybe use
• As long as the appraisal was completed within the last 60 days, it may be used when transferring lenders
• Gustan Cho Associates are EXPERTS in NON-QM lending
• We offer a 5% down payment jumbo mortgage, asset depletion mortgages, foreign national investment property loans, bank statement loans, one-year tax return loans, and many more
• If your everyday mortgage product does not allow you to qualify, please reach out to us
• Our NON-QM products open up homeownership to thousands of Americans

Finding A Direct Lender With No Overlays When Switching Lenders

Many clients transfer their mortgage to Gustan Cho Associates after receiving a denial.

• Since we do not have any lender overlays to get in the way, we are able to close more loans than most lenders
• Below are a few recent examples for why clients have moved their loan to us

Manual Underwriting On VA And FHA Loans

VA and FHA Loans are the two only loan programs that allow manual underwriting.

When a file is downgraded to a manually underwritten file.

• There are many reasons a file may need a manual underwrite
• Even when you have an approve/ eligible AUS, there are reasons an underwriter must downgrade the file to be manually underwritten
• For example, if you are disputing accounts on your credit report, or are not two years discharged from a chapter 13 bankruptcy, the file must be manually underwritten

Since we are experts in manual underwriting, please read our MANUAL UNDERWRITING BLOG for more details. 

Qualifying For A Mortgage With Recent Late Payments

Late payments reporting on credit.

• Most lenders do not allow any late payments on your credit report in the last 12 or 24 months
• Since we do not have this additional overlay, we will go directly off the AUS report and nothing additional
• Please see our AUS BLOG for more information
• Many clients reach out to us to pre-approve them with late payments in the past

Depending on the AUS, many times we can get this completed. 

Switching Lenders Due To Poor Customer Service

Receiving poor customer service.

• Every day we have incoming phone calls from potential clients asking us very basic mortgage questions
• Of course, we answer them, but their current loan officer should know the answers
• Buying a house is the largest purchase most Americans make in their lives, it is important to have a skill loan officer on your team
• We strive to be up to date on all mortgage guidelines for every mortgage product we offer

If you are not getting the customer service you deserve, please reach out to us today.

As you can see, Gustan Cho Associates at NEXA Mortgage, LLC is a full-service mortgage lender who helps many families across the Nation.  Gustan Cho Associates Mortgage Group are available seven days a week. We can be reached at any time of the day, mornings or evenings. We are a one-stop-shop for all your mortgage needs. We look forward to hearing from you!