Types of Lenders
Who you choose as a mortgage lender can impact the outcome of your home buying process. So it is important to choose a mortgage lender who understands your needs. I’ve included information on all 3 types of lenders below so you can make a choice that makes the most sense for you.
1. Big Banks
Big Banks are the ones you see on every street corner, grocery store, and ATM. These are the banks where you deposit your money, pay your bills, and cash your checks. The benefit to using a big bank is that they often have the best rates. However, these interest rates usually come at a cost. Big banks have a long way to go to improve their customer service experience, response times, organization, and speed. They also usually don’t work on nights and weekends. Expect to have multiple people touching your account, which means there’s no single point of contact when things go array. These factors create slow response times and have the potential to create confusion during the transaction when buyers need clear answers and have hard deadlines.
2. Online Lenders
Online lenders are the ones you see advertising at the top of Google when you start searching for a home loan. The benefit of using an online lender is that they usually have decent rates. In addition, they’re lightning fast when it comes to delivering pre-approvals. Speed is their appeal. But there’s a reason why they’re so fast…. Online lenders are like factories. They deal with cookie-cutter loans like a well-oiled machine, but if you need extra counseling or don’t fit neatly into their wheelhouse, they aren’t the best option for you.
3. Direct Lenders
These are the ones that are a little harder to find; They’re usually local, familiar with our market, and work with a lot of local realtors. As a result, they have a very informative and balanced view of the best loan products for buyers and what it takes to get an offer accepted in this market. The benefit of working with a direct lender is that they take a consultative approach. They will sit down with you, go over all of the loan options available to you, and help you choose the right program that will be most beneficial to you and your unique situation. In addition, because they have a vested interest in closing your loan, they will typically make themselves available on nights and weekends – when you need them most. The only disadvantage of working with a direct lender is that they aren’t always the ones with the lowest rates. Sometimes, they are, but not always.
As an agent, I work with fantastic lending partners. It’s important to start with a good lender who can help you determine your buying power and what programs are available.
If you’re thinking about making a move (or know someone who is), I can help! Just send me a text. No pressure, no sales tactics, just helpful advice and the guidance you need!
And finally, if you’re not thinking about making a move just yet, feel free to save this link for future reference, so you can come back to it!
