Take the 2-minute tour ×
Personal Finance & Money Stack Exchange is a question and answer site for people who want to be financially literate. It's 100% free, no registration required.

My wife and are are simultaneously in the market for a new home and trying to refinance a condo we rent out as an investment.

The stars may be aligning that both loans could go into underwriting simultaneously from two separate lenders. I realize this is probably extremely rare for the average person, so I'm wondering if this is going to be a problem for either transaction? Will it hurt my credit at all? Could underwriting for either loan be at risk? What other negative consequences could happen during this process? Would it be better to do one before the other?

share|improve this question
add comment

2 Answers

It would probably be better to do one before the other. Having both in underwriting at the same time may put both at risk as they will both know that you're getting another loan, but won't have the details about that loan, its burden on you and your obligations.

Lenders, especially for mortgages, are very sensitive to customers trying to secure additional loans while in the process. From my personal experience, I had to explain every query on my credit report within the last 3 months before closing, and I had to attest that none of them resulted in any additional loan (they frowned upon one additional credit card, but let it slide). When I got my HELOC, I was told they will not do the HELOC and the refinancing at once, I first had to finish the refinancing, and only then deal with HELOC - and that's when both were from the same lender.

share|improve this answer
1  
+1. I would suspect if the poster told either lender, they would let him know in no uncertain terms they don't like it. If they find out on their own, they would surely cancel the deal. –  MrChrister Dec 6 '12 at 21:06
    
Agreed, best to be careful, but I'd hope that the refi on the condo was to reduce the payment, not pull money out, in which case, would the other banker really care? –  JoeTaxpayer Dec 6 '12 at 21:52
    
@Joe they care because of the unknown. They have certain income to debt ratio, and not knowing the value of the other loan breaks their equations. –  littleadv Dec 6 '12 at 22:06
    
Understood. I've kept refinances on the rental a good number of months away from my home mortgage. Thought I was being a bit paranoid, but perhaps not. –  JoeTaxpayer Dec 6 '12 at 23:28
    
+1 Lenders are paranoid about such things, and if the OP can manage to postpone one loan, in fact, not even have begun the loan approval process on it before the other loan closes, life will be a lot simpler for him. –  Dilip Sarwate Dec 6 '12 at 23:59
add comment

Much will depend upon your credit history, income and equity position. If you barely qualified then you should be prepared for some trouble and perhaps even the cancellation of one (or even both) of the loans. If you have a good equity position and more than enough income to secure both loans - then in all actuality you should be able to simultaneously close. That does not mean that the lenders will view it that way.

If there is a way to delay one of the loans, it maybe your best option.

share|improve this answer
add comment

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.