"Dual-Apper"

"Dual-Apper"

A borrower who submits applications through two loan providers, usually mortgage brokers, without their knowledge.

Home purchasers sometimes submit more than one loan application as a way of protecting themselves against the hazards inherent in committing to one loan provider before the price is locked. Double-apping strengthens their bargaining position in negotiating the lock price. I don't recommend it, however.

Mortgage brokers despise dual-appers because they force the broker to do a lot of work and then bid for the loan or lose it. Being midway through the process with a resentful broker is not a happy prospect. If you run into a major roadblock, a resentful broker may not be willing to go the extra mile to remove it.

Locking does not provide complete protection against skullduggery, furthermore, because the lock price does not finalize the settlement costs other than points. At that point, the settlement costs are merely “estimates.” Aresentful but resourceful broker will find ways to augment your fees as you move to closing.

There is an alternative to double-apping that protects you better, is fair to the broker and avoids wasted effort. Demand to know the price before the work begins. While the price of the mortgage cannot be set in advance, the price of the broker's services can.

There is now a group of brokers, called Upfront Mortgage Brokers (UMBs), who quote a fee for their services upfront. Separating the price of the broker's services from the price of the mortgage eliminates gamesmanship by the broker and the need for double-apping. See Upfront Mortgage Brokers.