<p>I would follow your California realtor’s advice and use a California-based lender. Even if the objections turn out to be baseless, a seller might worry about an out-of-state lender when it comes to things like the appraisal and coordinating with the title company for closing, and might choose another offer over yours for this reason. Every state has their own set of laws and disclosures that need to be followed. California is an “escrow” state when it comes to closing and it is a community property state. There are enough unique characteristics that I would use a California-based lender.</p>
<p>" Our realtor in California recommended a company they work with (HomeServicesLending, affiliated with Wells Fargo Home Mortgage) and said “A seller will look more favorably with a pre-approval that came from a local lender”</p>
<p>@Marilyn, all sorts of red flags are coming up here. Sounds to me like your realtor might be getting a referral kickback from the lender, and is absolutely not looking after your best interests. That sounds like pure crap to me. I think if you are in a very hot market, perhaps a pre-approval from a very well known national lender, not someone who is just affiliated, might be useful. But then again, can’t you get a pre-approval from some big name, and then go with any lender you choose? Just don’t write it into the contract.</p>
<p>You need to go with the lender that you like, who you find is reliable and will give you the best rate. NOT the lender who is giving a referral fee to your realtor. If the realtor is very insistent about this particular lender, I would be very suspicious.</p>
<p>Referral fees are illegal - RESPA violation. Ask the realtor for 3 or 4 recommendations of local lenders. You don’t have to use the specific lender they mentioned, but an in-state lender makes sense. I work for a Maryland lender - and we lend in MD, DC and VA. It would be ridiculous for us to lend in a state halfway across the country where we are completely unfamiliar with the market, state laws and local practices. By all means, get recommendations and pick a lender you like and trust, but pick one who knows CA.</p>
<p>Our realtor didn’t push at all; mainly she was recommending we use a California lender and offered a name that she knew. No insistence whatsoever; just a suggestion of “one of the best I know”. She’s been very helpful to us for almost three years as we investigated the San Diego market without any real immediate intent to buy, even to the point of helping us pick places to rent via VRBO. So I seriously doubt she is trying to con us.</p>
<p>Thanks, rockvillemom, I’ll pass your points on to DH. Vey logical info. He’s an engineer; he should understand logic.</p>
<p>Someone on city-data was asking about San Diego realtors; maybe I’ll ask about mortgage companies there.</p>
<p>That’s good to know that she isn’t pushing anything onto you. I’ve gotten bitten that way by people trying to give their friends business, as opposed to looking out for my interest.</p>