Buying or Selling a Home/New Construction
My husband and I are building a new house in Apex, NC with the builder HHHunt. The builder has asked my husband and I to provide them a copy of our loan application even though we put a deposit on the house and showed them our pre-approval from the lender. We do not want to give them a copy of the loan application, as it has a lot of our personal information on it. Is the builder legally entitled to a copy of our loan application?
Good question! As you know, we can all -ask- for whatever we want. Whether or not the builder has a legal right would be a question for a legal expert in NC. I'm best guessing you are working directly with the builder and not with a Realtor. If this is the unfortunate case, the builder will feel as though he/she can push you with fear tactics for such things.
From the builder's vantage point: As you know, their thought process is to get some level of assurance the money they are putting into the construction comes back to them as quickly as possible. The best way to do that is to get further assurance your loan will go through.
Often times a pre-approval letter will be generated from a mortgage person after obtaining a credit report and running numbers. The actual full approval does not occur until the lender gets a copy of the title report, an updated credit report, verifies down payment source and income, etc. It is in this process that the lender may deny the loan for a number of reasons.
I'm certain you are clear your loan application will not assist the builder if their quest is to gain reassurance your loan will 'be good' when it comes time to close. The question to ask is, if you haven't already, 'Why?'. If the answer is regarding this reassurance, let him/her know you are willing to provide what is known as 'desktop underwriting' results from your mortgage partner. This report is generated when your application is entered into the lender's computer system. It contains all of your application detail to determine the results. But, it does not include all of it on the report -and- some of it can redacted. This is the very best your builder is going to get from -anyone- during this escrow period.
As your mortgage person may have already run these results prior to providing the pre-approval letter, it should be an easy request. I would strongly recommend you speak with them prior to suggesting you provide the report. Don't be surprised if the mortgage person may be holding off on running the report due to the building / escrow closing schedule. It may be because they are attempting to save you money on the cost of an additional credit report.
The final questions are for you to ponder: Are you concerned the builder will misuse the information on your application? Is there anything on your application you're concerned about to the point you think the builder would no longer be interested in selling you the home? Are you concerned the builder is going to hand the application over to another mortgage person? Or, are you offended they asked for it? These aren't questions I need answers to. They are just for you to consider in your thinking process.
'Sincerely hope this helps, Megan! And, congratulations on your new home! Woo hoo!