Does it make sense to try to get approved by 2 banks for the same deal/property?

[Nir]

Then in case one says no, you can still purchase the property by working with the other bank. Is it a common practice in real estate investments? what if both banks say yes, is it legal/ethical to say no to one of the them once the application process has started with both? The reason I`m asking is if you only contact one bank and they say no to the mortgage application you may not have enough time to get an approval from another bank and thereforee may lose an amazing property/deal(?) Your thoughts on the topic would be appreciated.. THANKS

 

[thejules]

QUOTE (investmart @ Dec 19 2007, 07:08 PM) Then in case one says no, you can still purchase the property by working with the other bank. Is it a common practice in real estate investments? what if both banks say yes, is it legal/ethical to say no to one of the them once the application process has started with both? The reason I`m asking is if you only contact one bank and they say no to the mortgage application you may not have enough time to get an approval from another bank and thereforee may lose an amazing property/deal(?) Your thoughts on the topic would be appreciated.. THANKS


Our relationship with our lendors is one based on Trust & Loyalty. So I would have to say this would not be a good practice. This would also drive down your beacon score on your personal credit bureau. This something that you don`t want to do either. I would suggest working with a recommended Mortgage Broker whom will guard you beacon score and find you the best deal.

I hope that helps!

 

[mikecunning]

QUOTE (investmart @ Dec 19 2007, 06:08 PM) Then in case one says no, you can still purchase the property by working with the other bank. Is it a common practice in real estate investments? what if both banks say yes, is it legal/ethical to say no to one of the them once the application process has started with both? The reason I`m asking is if you only contact one bank and they say no to the mortgage application you may not have enough time to get an approval from another bank and thereforee may lose an amazing property/deal(?) Your thoughts on the topic would be appreciated.. THANKS

In a sense, this is what a mortgage broker does for you...so you don`t have to do the work...they will shop the deal for you...the want to place the deal, of course, because if they don`t, they don`t get paid!

Having said that, in our commercial deals we deal with the institutions and the decision makers directly...when I buy a new property I may run it by a couple of lenders to see what their flavour is...if I think the Credit Union will do it then I don`t call the private guy...but it is nice knowing the private guy is there when I need him!

 

[Nir]

Thank you Mike and Jules, I really appreciate your experienced advice! I found a VERY interesting deal and just a little worried if I get a negative response from the bank I will not have time to get it approved by another bank. (you answered this question though). cheers.

 

[RobMacdonald]

The other benefit to using a mortgage broker, is to decipher the different policies each bank has with respect to rental portfolios, property in general and overall lending guidelines.

It is easily possible you have a deal that gets declined by one bank, and gets easily approved by another. Certain banks will have very different guidelines to mitigate risk.

 

[Nir]

Thank you rob, how much time should I "give" the banker to respond (3 days, 2 weeks, etc.?? I don`t want to put too much pressure on the banker obviously, on the other hand time is of an essence here. Cheers.