Homeowners make a sizable investment when they purchase a roof for their residence. Keeping an eye out for indications that a new roof is necessary will ensure that the house is defended from external elements.
Local lenders also often have unique or creative loan programs, such as bank statement loans for self-employed borrowers or mortgages for borrowers with recent bankruptcy histories. This flexibility can save you money.
Local mortgage lenders have their finger on the pulse of the region and can often get a more comprehensive picture of lending risks than larger national or online financial institutions. For example, what looks to a significant lender like a neglected area that is in decline is an up-and-coming neighborhood where property prices are increasing.
Local lenders also know more about local government and zoning requirements that can affect home loan applications. In addition, they’re more familiar with available programs that may help home buyers, including first-time buyer assistance.
In addition, local lenders can build a personal relationship with clients and provide them with the expert advice they need to make an informed decision about their mortgage options. This helps to reduce the uncertainty and anxiety that can be associated with financing a home. It also allows borrowers to develop trust with their mortgage provider, which can lead to an ongoing relationship for financial advice and other financial services.
As small lenders are part of their local economy, they know what’s happening in the market and can be less conservative when underwriting mortgages. For example, if you want to buy an old home on acreage that’s being turned into a subdivision, your local lender will be familiar with this type of property and may be more willing to approve your loan than a big national bank.
Many smaller lenders do “portfolio” or “non-agency” mortgages, meaning they keep the loans in their portfolio rather than selling them to Fannie Mae or Freddie Mac. This allows them to develop unique loan programs like Rob’s Mortgage Loans, not available at large banks, such as bank statement mortgages, mortgages for borrowers with a recent bankruptcy, bad credit mortgages, and ITIN loans for immigrants without a Social Security number.
This flexibility is essential for newcomers in the banking industry. They need a flexible lending platform that can be scaled as their business grows while retaining a simple architecture to reduce operating costs.
Small banks and loan services operate on standard business hours, unlike national chains or online lenders that work around the clock. If you choose to borrow from a local lender, you can be assured that the person handling your application will know your name and face and remember important details about your financial history. That can make you feel safe and secure with your home loan. However, smaller lenders may charge higher interest rates or lender fees to cover operating expenses.
As mentioned above, banks prioritize their profits and may market other financial products throughout the mortgage process, such as checking or savings accounts or credit cards. They may also offer convenient branches, online banking services, and the ability to make home loan repayments automatically from your transaction account.
On the other hand, small lenders may have smaller marketing budgets, so they may have to be more creative in their approaches. This could be a good thing for you, as they may find innovative ways to offer attractive interest rates that aren’t available from the banks. In addition, small lenders often keep your home loan in their portfolio, allowing them to develop financing programs that aren’t Freddie Mac eligible—such as bank statement loans and bad credit mortgages. This will enable them to offer better home loans. Ultimately, it’s all about what matters most to you. The pros and cons of each option should be considered before making a final decision.