Pre-approval from multiple lenders

[Satyajit Bappanadu Manjunath]

I am a rookie investor looking to invest in SFH to hold as rentals long term. I am planning to use conventional financing to finance my investment. I have started looking for listings recently.

I am a bit confused when people ask to "shop around" for a conventional loan. As of now, I have a list of 4-5 lenders that I have done some research on. What is the typical way to go about this?

a) Get a pre-approval from ONE of the lenders and use it to put in offers. Later, once the offer is accepted, check with the 4-5 lenders on who can give me the best terms?

b) Get pre-approval from ALL lenders and use the best one to put in offers. Once the offer is accepted, use the deal with the best terms to finance the property.

Option a) will involve starting the relationship with most of the lenders once the offer is accepted. I am not sure if this is a good idea given that I will have to close quickly.

Option b) will involve submitting documentation to all lenders (I don't mind that), but I will be using the services of only one lender. Seems like I am wasting time for others.

Some insight from experienced investors who use conventional financing or lenders would help me. Thanks for taking a look at my situation.

[Will Fraser]

Hi @Satyajit Bappanadu Manjunath, Option A is the winner.  The pre-approval process and the actual loan process are only distantly related.  By being pre-approved by a lender you are not entering into an obligation with them, so you could be pre-approved by one and then, once you are under contract on a property, shop around to make sure you have the terms, conditions, and service that is right for you.