How to Switch Lenders in the Process of Obtaining a Mortgage

Lenders can be changed during the mortgage loan process.

When a borrower applies for a mortgage with a lender, he expects to be able to complete the process with that same lender. However, sometimes the borrower needs to change lenders during the mortgage loan process. This can be due to inadequate customer service, a drop in interest rates or another situation. It is easy to switch lenders in the mortgage process, if necessary to complete the mortgage transaction.

Instructions

1. Decide that you need to switch mortgage lenders and determine who your next lender will be.

2. Ask your original lender for copies of any documentation that you gave him or her. This should include an application, two months of bank statements, two months of pay stubs, and two years of tax returns.

3. Request a copy of your appraisal and inspection (if completed) to be sent to your new lender. You may have to pay a transfer fee, depending upon your state.

4. Sign and submit an "Intent to Proceed" letter. This letter was sent to you with the "Good Faith Estimate" form from your lender. Mark an "x" next to the line: "I/We do NOT intend to proceed with this lender."

Tips & Warnings

• Keep copies of all paperwork sent to your lender. In the event that you need to change lenders again, this will keep you from having to request the information again.

• While a lender should readily give you all of your paperwork when you switch lenders, he or she may not immediately fax or email over your paperwork. You may have to go to the office directly to get the results that you need.

References

• Federal Reserve: Understanding the Home Mortgage Process