When you’re preparing to purchase a home, you have a bevy of decisions to make. Even once you’ve decided on your budget, you’ll still have to decide on your ideal neighborhoods, whether you want to spend time renovating (or even flipping) a home, which school districts you prefer, and so much more.
Still, there’s yet another aspect many first-time homebuyers don’t consider much ahead of time: choosing the best home loan, and the best lender. We get it: home financing simply isn’t as instantly appealing as imagining one’s dream home. Ultimately, though, it’s at least as important as the number of bedrooms and bathrooms in your new abode.
With that in mind, let’s jump into today’s topic: Local vs. National Mortgage Companies, where we’ll compare the pros and cons of each so you can decide which is right for you.
Local Lenders: The Pros
1.) Deep Understanding of Your Market
Local lenders are members of your own community. Because they often live and work in your neighborhoods, shop at your farmers market, and pick up coffee at the same café as you, they know your target neighborhoods better than any chain lender ever could.
Furthermore, they have established strong relationships with underwriters and appraisers. When your finances are on the line, this trusted line of communication is exactly what you want.
Local lenders help your chances of getting approved. Any real estate agent who is savvy about the local market will take note of your approval by a lender who is established in your region. After all, if your knowledgeable lender believes you’re prepared to purchase a home here, you are!
2.) Increased Individualized Attention
Local lenders work with a smaller, centralized client base, which naturally reduces their workload. Because they have more availability at any given time, they’re sure to have more attention, time, and energy to give you.
When you choose a local lender, you’ll receive more frequent communication, and the emails and texts you receive will be composed with your needs in mind.
3.) Greater Availability
Working with a local lender ensures that you’ll have face-to-face connections with an expert member of staff. You won’t have to sit around on seemingly endless customer service calls, press a dozen buttons for a computerized voice, and you won’t wait weeks to hear back from your lender.
Instead, you’ll have a personal extension, cell phone number, and email address, all of which will get you right in touch with your lender. You won’t find yourself sitting around, feeling like a bundle of nerves during your first home purchasing experience.
4.) Better Rates
In a side-by-side comparison of the same loan sold by a local company and a national company, the local lender will usually offer better rates. If you are eager to snag the best interest rate possible, start by speaking with a local lender.
Local Lenders: The Cons
1.) May Not Suit International Buyers Best
Local lenders do their absolute best to take care of all homeowners in their region who seek their services. With that said, it’s worth mentioning that maintaining communication with a locally-based company can be tricky if you live abroad or are enlisted in military service.
Typically, local lenders are open during traditional banking hours, which can—but doesn’t necessarily—make it challenging to reach your lender immediately, especially if you’re residing on the opposite side of the world.
If you want to work with a local company, even if you’re abroad, contact the lender you’d like to work with and see what they can do to ensure you’ll have someone to call when you’re awake and ready to talk business.
2.) Streamlined Product Ranges
While this can be great when you’re first choosing a mortgage option, it may present a challenge if you’re looking for a more obscure or very specific loan. A local company probably won’t offer every option that a national company will, so it’s a good idea to speak to your lender directly about your options.
National Lending Companies: The Pros
1.) Rapid Approval Process
When speed is the most important factor, it’s comforting to know that a national lender can often set you up with a loan offer in one business day. You may pay more in interest, but the rapid approval process is worth it if you’re worried your dream home is about to be bought out from under you.
2.) Brand Prestige
There are a certain number of national lenders whose names instill confidence on brand recognition alone. While a local lender will be known throughout their region, someone in another state may not know about them. National brands are famous for their customer care and history of positive interactions with their clients. They are, in other words, generally a low-risk choice.
Just be sure you’re not paying more than you ought to just to make sure friends or family who live outside your area will be pleased with your choice of lender. Established local lenders with a history of excellent customer care aren’t a dime a dozen, but they certainly can be found.
National Lending Companies: The Cons
1.) Higher Interest Rates
Larger companies have more overhead and must maintain a higher revenue stream. As a result, you’ll often have to pay higher interest rates on loans from a national company.
2.) Less Attention
Because you’ll be one of thousands of clients, you’ll be unlikely to receive a high level of personal customer care from a national lender. Your lender will do their best to help you, but their required workload won’t be conducive to them being able to offer the level of assistance you’re hoping for.
Are you looking for assistance with a loan from a local Middle Tennessee lending company? Contact our friends at Steadfast Mortgage today and get connected with one of their loan officers! – steadfastmortgage.com