two possible lenders

[hestia]

What is the name of your state? CA

I am in contract on buying a house I really want. I have somewhat sketchy credit and so I submitted applications with two mortgage brokers at the same time. Both are now saying it looks good for the deal but nothing is guaranteed. One deal is better than the other for me because I have to come up with less down. We are now at the stage where the appraisal has to be gotten and escrow opened, etc. Since I don't and can't have 100% confidence that either loan will go through, should I open two escrows, get two preliminary title searches, two appraisals etc. and keep the process going with both brokers until one or both come through? Are there any legal problems with doing so?

 

[JETX]

Are there any legal problems with doing so?

Yep, you will have to pay double.... and the one you don't pick will demand you reimburse them for the costs they incurred in playing your 'game'.

 

[FloridaRob]

here is one thing to consider. IN regard to the appraisal. YOU ORDER IT....If the lender orders it, then they do not have to release it to another company if the deal falls thru. IF you order the appraisal, then you can tell the appraiser to change the client name to the 2nd lender. It will save you probably $275 or $300 at the least.

Tell the lender you want to order the appraisal. THey will usually agree if the appraiser is state certified and not on some black list...Make sure the appraiser is acceptable to both lenders before you contact him for the appoinment. Also tell the appraiser up front you may want to do this. IF you are the client, then you can control where the appraisal goes....

 

[MortgageGuru]

Also, simply use the same Title and Escrow company. Have you been issued a pre-approval yet from either broker?

 

[hestia]

Thanks for the answer Mortgage Guru. Yes, they have both issued pre-approvals. Won't they at some point find out about each other? Is it okay to go through to the end with both and see which one comes up with the money at closing? Or at what point do I stop the process with one of them.

Here is my problem. I have a pretty big IRS tax lien. The one mortgage broker found a lender who will accept a structuring of the deal in such a way that the lien gets paid off together with the home purchase, partly with cash the seller returns to me and partly with a whole bunch of my own cash. The second guy says the underwriter said the lien is not an issue as long as I am on a repayment plan with the IRS, which I am, so I have much less cash to come up with for that deal. However, I can't believe the underwriting supervisors at some point in the process are not going to question the lien and come back with a condition that it be paid first (even though the IRS takes second position behind the mortgage lender) because that seems to be what lenders want. My reasoning is that if I have to say goodbye to one, it is the second guy on the assumption the lien will be an issue (even though much less $$ down), rather than the first guy, whose deal includes removing the lien (but more $$ down = debt) but I have no idea whether I am right or wrong (first-time homebuyer).

I wasn't intending to play these two guys. I consulted the second guy when it looked like the first guy couldn't come through, and then the first guy came through. Thanks for helping.

 

[FloridaRob]

hestia, is the tax lien on you personally or on the house. that makes a difference.

 

[JETX]

hestia, is the tax lien on you personally or on the house. that makes a difference.

Since she said "I have a pretty big IRS tax lien." and she has not purchased the house yet, the answer to your question should be obvious.

 

[FloridaRob]

sorry, Jetx, got a hurricane bearing down on my head so I am a litle distracted at the moment. Thank you for pointing out the obvious.

Hesti. THere are lenders that will do this kind of deal if you are in an agreement with the IRS. Others will require the loan be paid at closing. One lender that will do this without an agreement is Option One MOrtgage. They are one of the only lenders that will do this kind of deal because they do portfolio all their loans. They will loan to a person with a large IRS lien. Since the IRS lien is on you and not the house there is a good chance they can get this done. If the broker is trying to sell it on the secondary market, then he is spinning his wheels. No 3rd party lender will touch this or you. The title company will run an exam on the seller and the property but not you. Because of that they can get a clear title. You will probably pay a rate of 8.5 or close to it.

Are you living in the house now. I ask that because you said something about the seller giving cash back. YOu cant get cash back (legally from a seller) during a purchase. If you are living in the house now there is a possiblity you can treat the new loan as a refinance even tho the house is not in your name.