If you’re reading this it’s most likely because we sent you this link because you’re exploring split financing. Assuming that’s the case, you need to read this page in it’s entirety AND check out Second Mortgages Details as each will answer a number of questions you may have about the Second Mortgage Disclosures as well as the overall process.
Their Compliance Disclosures
All lenders are mandated to send out loan disclosures within 72 hours after certain information is received AND those disclosures cannot understate, or under value, the terms of financing. When we send your information to the second lien lender it starts their compliance clock. Second Lien Lenders will then send out initial disclosures showing a “worst case” scenario rather than trying to call you and verify your information. We will ultimately provide them with the documents and information that allows them to price the loan correctly.
Costs and RatesThere are some second lenders that send initial disclosures showing a crazy high rate (like 9%) and a bunch of fees that we have already disclosed on the Loan Estimate (like the appraisal fee, title fees, recording charges, etc.). Typical second lien closing cost range from $500 to $700 (assuming there aren’t any points or title policy). Second lenders can use our appraisal and other docs so those costs won’t be double charged. Again, take the initial disclosures with a grain of salt and feel free to forward us anything they send to you and we’ll be happy to review them and answer any questions.
We’re Not CopiedWhile we are in communication with the second lien lender and will obviously work with them to close your loans, we are not copied on disclosures they send and we are not privy to conversations you have with them. The reason we tell you this is because we want you to forward us any information that may contradict what we send you or that you have questions about. Our loan summary worksheets outlines the second lien terms and estimated costs and we want you to let us know if the second lender extends different terms.
Supporting DocumentsWe will be providing the second lender with your supporting documents BUT you will need to sign their initial disclosures to begin their process. Once they initially determine that you’re approved, they will email us a list of conditions to satisfy their underwriting guidelines (like tax returns, pay stubs, etc). Assuming we have the appropriate documentation we will forward that to them; if we don’t, we will contact you and request that paperwork to be sent to us so we can review it and forward it to them. They’re Not Us If you can’t tell by now the second lien lender is not our company and they operate a bit differently. First of all, they have their own underwriter looking at your file which means they may require additional documents that we don’t. Also, they have different guidelines which means that just because your loan is approved with us it doesn’t necessarily mean it’s approved with them. Also, they probably don’t move as fast as we do; therefore, please be responsive to all requests made. Lastly, they may not allow things like a Power of Attorney AND they may require that you update your Driver’s License if it’s expired or if the address isn’t correct. Crazy! As always, please call us if you have any questions.
Loan Officer, NMLS # 729612