Pros and cons to seller-chosen lenders for apartment buyers

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Individuals interested in purchasing apartments in New York may encounter sellers who have already selected a mortgage lender for them. Sellers, it seems, are adopting a strategy quite similar to the tactic used by developers with a new offering. Many banks have taken a cautious stance when reviewing the types of buildings that they’re willing to finance so many developers started working with a preferred lender.

For apartment sellers, taking time to select and recommend their preferred lender will also allow them to avoid buyers who can’t find financing on their own. They’ve already made sure that the property they’re trying to sell is eligible for backing by Fannie Mae so the interested buyers they’ll end up conversing with are the ones who are also credit-worthy.

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Buyers also save more time with the preferred lender setup. With arrangements for a lender already in place, the buyers can opt out of dealing with management companies themselves.

However, agreeing to this condition does not mean that they can’t apply for a mortgage with another lender. It just means that when their own plans fail, they already have a solid backup plan that they can go with once they’re pre-approved by the seller-chosen lender.

In spite of the lender’s pre-approval, there is still no guarantee that the mortgage application will easily be approved. Without any previous encounter with the lender, they may have no solid proof that their application will be swiftly processed, and they may end up paying additional fees due to the length of the processing time.

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