The Danger of Internet Lenders in Arizona

As a buyer in Arizona you are free to choose any lender with whom you would like to work. You can choose a local company, a national bank or an internet lender. The choice of your financing entity is entirely up to you. However, it is not a choice you should make lightly. Any lender you choose to work with must work in conjunction with you, your real estate agent and your escrow/title company.

In Arizona our standard real estate purchase contract requires you as the borrower to tender an LSR (Loan Status Report) with your offer. Normally the LSR is completed by your lender and states the type of loan you are obtaining and verifies for the seller the status of your qualifying for the loan with which you plan on purchasing the property.  If you choose an internet lender you should make certain that they are willing to complete an Arizona Loan Status Report (LSR) that you can attach to your offer. While it is true that the lender does not have to sign the LSR and you can simply indicate as the borrower that you will obtain financing within 5 days of the offer’s acceptance, most listing agents will discount the seriousness of an offer not tendered with a fully completed LSR. That means that if you work with a lender who refuses to complete this form for you and your real estate professional that you may have difficulty in getting your offer accepted.

This is just one of the many reasons why you should choose your lender carefully and work with someone you know and trust. We would recommend that you get the input of your real estate professional regarding any lender that you are considering using in the transaction and get your agent’s input as to how that might affect you in the real estate transaction.

The standard AAR Residential Purchase Contract also obligates you as the buyer to provide periodic Loan Status Updates (LSU’s) to the seller and/or listing agent. If you work with a lender who is not willing to complete this form it is possible that you could be forced as the buyer into the cancellation of your contract and risk the possible loss of your earnest money deposit.

Choosing a lender is serious business. Work with lenders that you know, trust and can rely on in any purchase of real estate.

Course Creators is a national education company. We receive no referral fees and have nothing to gain from whichever lender you choose to work with. This information is provided only for the purpose of assisting you in researching your potential lender in a real estate transaction.

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