Thursday, August 31, 2006

Adventures in First-Time Homebuying #5: Your Sexy and Glamorous Journey to Pre-Approval, Part 4

Author: Nick
Category: Money
Topics: , ,

local piggies good, internet piggies bad

Yes, I know that this episode officially concluded yesterday, but I forgot one extra bit of advice that I don’t want to get buried in an edit to Part 3.

Another Reason to Stay Away From Internet Lenders

Recall that, in my experience, Bank of America‘s loan packages absolutely crushed those presented by internet lenders like But what if one of those internet lenders had a better, cheaper loan? And what if they had excellent customer service, too? As it turns out, we are very lucky that an internet lender did not beat Bank of America’s loans.

Had we gone with an internet lender, our offer would have been rejected by the sellers.

Got that? Yes? Well, just to be sure, I’ll say it again.

Had we gone with an internet lender, our offer would have been rejected by the sellers.

Even if we had presented a genuine, bona fide pre-approval letter from First Internet Bank of Awesomeness, our offer on the house we close on next week would have been rejected. The sellers’ agent said exactly this to our agent.

So why all the hatin’ on internet lenders? In this case, the sellers had already located a new house and wanted to ensure that the process of selling their old house went smoothly. That meant no hiccups on the part of the buyer (me) and definitely no hiccups on the part of the buyer’s lender. Knowing that my loan would come from Bank of America did much more to soothe the nerves of the sellers than if it were coming from some lesser-known internet lender.

Of course, plenty of sellers accept offers with pre-approval letters written by internet banks all the time. But in cases where time is short and there may be other offers on the table, the type of lender you choose could make all the difference in you getting the house or not.

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