Many farmers are led to believe that once a loan is issued, it cannot be transferred to a different farm credit lender. Although there might be no reason to make a switch when things are running smoothly, there are some instances when a borrower needs to refinance their loan to lower the monthly mortgage, or they simply want a better deal—regardless of where they are at during the loan or home buying process.
We will help you find out how and when to change your farm credit lender and know whether you are getting a good deal or not. But to determine how and when to change your credit lender, you must familiarize yourself with the loan process first.
The Farm Credit Lender Mortgage Process
The process will begin with the mortgage origination period. This stage involves the mortgage application, and during this stage, you will be interacting with a loan officer, mortgage processor, and underwriter. The best time to switch to a different lender is during the first stage to avoid any delays in closing the loan.
Once your loan is funded, you will move on to the next stage, which is the servicing stage. At this point, you will be receiving mortgage statements and escrow analyses. If you do not switch to a different lender, these documents will come from the mortgage originator.
Although you can legally switch lenders, note that it isn’t an easy process that happens overnight, especially in the final stages. But regardless of what stage you are in—you can switch to a different lender. The question is, why?
Why You Should Consider Changing Farm Credit Lenders
If changing lenders is not an easy process, why should you consider it? Well, most people consider switching lenders for these two main reasons:
They are not happy with the customer experience
Not all mortgage lenders offer the best experience for their customers. Some lenders cause delays, some are unresponsive, and some even lose documents and make unexplained changes to a client’s contract without notifying them. They do this because they can, and it’s unfair to the borrowers. While some borrowers don’t mind, some don’t know that they have the option to switch to a different farm credit lender.
They are shooting for a better deal
Because some borrowers are not happy with the previous lender’s customer service, another advantage of making the switch is getting a better deal—aside from expecting better customer service.
If your previous lender’s interest rates suddenly increased, that is a clear sign to switch to a different lender. There is a chance of getting lower interest rates. However, some lenders might have lower interest rates; you still need to assess all costs to ensure that you are getting a better deal.
Buying a property is not easy to navigate, especially when getting a significant loan. So you need to take your time to understand your rates and associated costs before signing anything. Understanding these factors will save you time and money and help you avoid the hassle of switching lenders in the first place.
Disadvantages of Switching Farm Credit Lenders
Switching lenders isn’t always the best option. There are also possible disadvantages if you do not review the policies, rates, and associated costs to see if there are advantages. Here are the disadvantages you should look out for:
Switching lenders might cause delays in closing time
Depending on the stage you are in with your original mortgage lender, switching will most definitely cause delays in closing time. If the property you are buying is in a rush to close, switching lenders could affect the sale. To avoid any delays, you should review the rates and decide to switch during the earlier stages of the loan process.
A new credit check and a new appraisal
Switching lenders will mean going through another background and credit check—and possibly a new appraisal of the property you are looking to buy. Inquiring for new credit will affect your credit score. And if you have already inquired about your first loan, your credit score on the second one will most likely be lower—which can affect mortgage costs. Plus, the new lender is also likely to do their appraisal of the property you are buying, which could only mean more delays.
How to Change Your Farm Credit Lender
The first step is to get your mortgage pre-approved by your new lender before making the switch. But before switching, you may want to notify the seller and your real estate agent and be transparent about it to avoid the suspicion that could lead to more problems with the property you are buying.
Although you might experience problems switching lenders, especially after you close a deal with the previous one, the best solution would be to go with a lender that understands what you need, such as United Farm Mortgage.
United Farm Mortgage
United Farm Mortgage makes loans in all 50 states and has helped many farmers for over three decades. We know the struggles and how intimidating it could be to get a loan moreover switch farm credit lenders. Because many are like you, looking to make a switch to get a better and tailor-made deal for them—they already know what to do.
What services do we offer?
Most of the services United Farm Mortgage offers are tailor-made for farmers. We can give you agricultural loans for farms, hobby farms, equestrian centers, and county-side estates. They also offer farm loans, including the best rates and lowest associated costs, allowing you to run your farm the way you want it to.
We know about farming, whether it is the agricultural side or issues related to family-owned farms, more than any other lender. With that in mind, there is no other lender you want, especially if you are looking to buy a farm, finance a business for a farm, or buy out your siblings if you want complete control over the farm you were born and raised on.