How to Change Bankers During the Mortgage Process

The focus of the mortgage process should be your home, not your loan.

The focus of the mortgage process should be your home, not your loan.

Obtaining a mortgage loan for a new home purchase or a mortgage refinance can be a lengthy process. For new homeowners or recently married couples, it is important that there is a bond of trust between you, the consumers, and your loan officer. While most mortgage officers will do their best to secure advantageous mortgage terms for their customers, it is possible that you could run into unfavorable loan terms or unfavorable lending officers. Changing mortgage bankers during the loan process is a relatively easy procedure.

Pull your own tri-bureau credit report (comprised of reports from TransUnion, Equifax and Experian) and purchase your three-digit FICO score. These documents will illustrate your creditworthiness and help you determine which mortgage programs you qualify for and which programs are most suitable. FICO scores above 720 are excellent.

Research bank and credit union mortgage programs based on your creditworthiness. Compare these offers to the program your current banker is working on. Make sure before you change bankers that you can find a more favorable deal elsewhere.

Narrow the search for a new mortgage banker to two or three lenders. Review with your spouse your mortgage loan priorities. These can include monthly payment, mortgage rate, amortization schedule and flexibility of the loan. Based on these preferences and the offers with other bankers, choose a new lender.

Speak with your current loan officer and instruct him to cease the underwriting process on your existing loan application. Gather copies of two recent pay stubs, your two most recent years of Forms W-2, your two most recent income tax returns, your homeowners insurance and your property tax bill.

Contact the new mortgage banker and request a new mortgage application. Provide the new loan officer with the income and property documents.

Sit down with the new banker once the mortgage application is processed through underwriting. This will allow you and your spouse to meet your new loan officer face to face and review the preliminarily approved terms of your mortgage loan.

Proceed with the new mortgage lender if the terms of the new mortgage are favorable, meet the priorities you laid out with your spouse and offer financial advantages -- both in the short and long term.

Items you will need

  • Two recent pay stubs
  • Two years of Forms W-2
  • Two years of tax returns
  • Copy of homeowners insurance
  • Copy of recent tax bill

Warning

  • Be aware that switching loan companies during the mortgage process will incur a new inquiry on your credit report.
 

About the Author

Based in Eugene, Ore., Duncan Jenkins has been writing finance-related articles since 2008. His specialties include personal finance advice, mortgage/equity loans and credit management. Jenkins obtained his bachelor's degree in English from Clark University.

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