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Updated over 4 years ago,
How many banks should you seek loans from?
After years of analysis paralysis I have finally decided to stop thinking of excuses to get started, and finally get started. Today.
I talked to 4 banks today for mortgage approval, while in the process of setting up an appointment with the 4th lender I was informed that my approach was not recommended.
At some point over the years I got the impression that I want to seek out a few different banks for loans and determine which was best for my situation before approaching a realtor, so that when I am ready to offer on that "perfect property" I know I have funding secured and can put an offer in immediately. Today I was informed that I should only start off with one approval from one bank to get my foot in the door with a realtor and start touring properties. Only when I have my "perfect property" picked out should I then seek out multiple options from multiple banks.
The reasons I was told:
- I don't want multiple banks pulling my credit this week because if I don't find a property within x amount of days, they would all pull my credit again down the road to see if my score had changed. All of this credit pulling from multiple banks, multiple times, would be bad.
- mortgage rates could fluctuate depending on how long it took me to actually find a property and get a contract on (although one bank I found would offer a rate lock for 60 days - If rates drop, mine drops. If rates go up, mine doesn't)
- overall, most banks will not drastically differ in options and therefore to meet with so many different banks would be a waste of my time.
All of this advice was given to me by the loan officer himself from the last bank I spoke with, said he wasn't on commission and had no pressure for my business, he was simply recommending the path he thought was best for me. He was very friendly.
The main question behind my long winded question - should I continue to seek out approvals from the 4 lenders I picked out, or should I cancel some of these meetings and only use 1 lender for the time being. I couldn't think of a better place for this question than the BP community.
As a little disclosure, there are many properties on my watch list that I am ready to tour inside and offer on. I know what I'm looking for and would consider myself to be familiar with my local market. I know what I want to offer on, it just comes down to how long it takes for an offer to be accepted and a deal to be reached. I just need to secure a lender.