Cross application with seller's lender?

User Forum Topic
Submitted by edna_mode on December 27, 2012 - 3:41pm

O fountain of wisdom that is the pigg community, a question from a gentle reader:

Can anyone tell me what the consequences of cross applying with a seller's preferred lender is? Specifically:

1) What information leaks from that lender to the seller from the buyer's application? Is this just a yes/no kind of answer like merchant verification ("yes/no this applicant qualifies for $X loan"), or more information than that?

In other words, if my offer says I will put $foo down, and I show that lender documentation from my financial institution that I actually have $(foo + bar) in the account, what prevents this information from contaminating my negotiation with the seller? Because the seller would LOVE to know "hey, I can hold out for an extra $bar because I know that these buyers have it"?

2) How much should this kind of application cost? Will it be a similar price as a typical buyer-initiated application?

3) Has anyone done this from either buyer or seller side, and be willing to share their experience?

4) What else should I be asking that I am not?

Thanks!