Using Out of Area Lenders and Loan Agents

23 Jan Using Out of Area Lenders and Loan Agents

The use of out-of area-lenders and loan agents and/or unqualified or inexperienced loan brokers may have a severe effect on your purchase transaction.

In the past few years, the process of qualifying for home purchase financing has become much more difficult and time consuming. Lender guidelines and procedures can be onerous, confusing and subject to sudden change. One of the biggest problems seen in San Francisco is the use of lenders, loan agents and loan brokers who are not familiar with the cityโ€™s unique real estate market: its values, neighborhoods, purchase contracts, property types and statutory law. Despite regular assurances that the loan approval, appraisal and funding processes are proceeding appropriately, it is not unusual for large and often-times irresolvable problems to arise regarding the appraisal, loan terms, the timely removal of contractual loan contingencies, the receipt of loan funds in escrow, and the scheduled close of the transaction.

All of which can have severe consequences for the buyer, including increased loan costs, aggravating delays, costs pertinent to the extension of the close of escrow date, termination of contract, and even contractual default with the possible loss of buyer deposit monies.

If the transaction is not damaged beyond repair, it is not unusual for the buyer to have to begin the loan approval process from scratch with a new lender, with all the attendant costs and efforts of doing so. To do so, the seller will have to agree to a change in contractual timelines.

It is understandable that a buyer might wish to use a lender or loan agent with whom they have a previous relationship, but considering the size and complexity of the financial transaction, WE STRONGLY RECOMMEND THE USE OF FINANCIAL INSTITUTIONS AND LOAN AGENTS HIGHLY EXPERIENCED IN THE SAN FRANCISCO MARKET.

At minimum, it is suggested that buyers โ€œdouble-packageโ€ their loan application with a local lender.

Paragon agents are happy to provide our clients with a variety of experienced, local sources for financing, and do not receive any financial benefit thereof.