Mortgage Negotiations After Underwriting?

Hi All,

I’m purchasing an $875K house in the Tampa, Florida area with a 20% down payment. Here’s where I stand:

  1. Physician Loan:

    • 6.875% interest rate
    • 0.375 points
    • No PMI
    • $28K closing costs
    • Won’t confirm 10% down option until underwriting is completed.
  2. Conventional Big Bank Loan:

    • 6.75% interest rate
    • 1.86% points (~$13K)
    • $21K closing costs
    • No guarantee of a competitive rate without locking in.

I’d prefer to put 10% down, but the physician loan won’t confirm eligibility for that until underwriting. I’m considering:

  • Asking the physician loan provider to price match the big bank loan.
  • Proceeding to underwriting with both lenders to compare options, knowing I’ll lose a $500 deposit on one.

My Concerns:

  • Will the title company have issues with two simultaneous underwriting processes?
  • Is this common practice, or will it cause unnecessary complications?

Any advice or similar experiences would be greatly appreciated. Thanks!

The title company doesn’t decide which loan you pick, but they’ll need updated paperwork from the lender if you switch. It could cause delays, so be careful with the timing.

Your lender should be able to prequalify you for the 10% down physician loan without waiting for underwriting. If they can’t, it might be worth finding a more experienced lender. PMI isn’t as bad as it used to be, so consider it as an option if the numbers work better with the big bank loan.

Running two loans can confuse the title company and may raise red flags. If you’re leaning toward the physician loan, push for pre-underwriting answers on the 10% option before proceeding.

Thanks for the advice! I’ll press the physician loan lender for clarity on the 10% option and keep the big bank as a backup. Hoping to avoid losing time or money unnecessarily.