Are you thinking about entering the world of homeownership? As you navigate the home-buying process, one of the more important choices you’ll need to make is selecting a lender. While many prospective homebuyers instinctively lean towards big-name banks or online lenders, there are several compelling reasons to consider working with a smaller local lender instead.
Reliability
A local lender typically has a stronger reputation for closing on time compared to their larger counterparts. Such lenders often work with a smaller client pool, allowing them to focus on ensuring that all approval steps are completed on time. Because of this, there is a very good chance that you won’t have to worry about unexpected delays or hiccups during the closing process. Moreover, these lenders usually maintain more control over their decision-making processes, meaning they are less likely to face bureaucratic snafus that could delay your closing.
Personal Service
As I’ve mentioned before, local lenders typically work with a smaller client pool. This means you’re more likely to receive personalized, attentive service throughout the entire home-buying process. In my experience, these lenders usually have more time to devote to answering questions and addressing concerns.
Additionally, these lenders certainly do not adhere to traditional “banking hours.” They are much more accessible, often offering flexible hours and direct lines of communication, ensuring you’re never left in the dark. I feel a bit guilty admitting this, but it’s quite common for me to call my lenders on Saturday evening or Sunday morning. This accessibility can be a huge advantage, especially when you find the perfect house and need an updated pre-approval letter outside of normal working hours.
Local Expertise
When it comes to understanding the ins and outs of the housing market in your desired community, few can rival the knowledge of a local lender. Their familiarity with local property values, tax laws, and real estate trends allows them to provide valuable guidance and insights that can help you make informed decisions while searching for your dream home. A local lender may even alert you to new properties, special loan packages, or local incentives tailored to meet the unique needs of your community.
Better Realtor Relationships
Local lenders have typically spent years, if not decades, cultivating strong working relationships with area real estate agents. This familiarity and camaraderie can be beneficial to you as the buyer, as it can lead to smoother communication between all parties involved throughout the transaction.
Strengthening Your Offer
Unfortunately, the reputation of some large banks for poor communication and late closings can sometimes be a deterrent for sellers when reviewing offers. By contrast, a smaller lender with a solid reputation for efficiency and reliability can help instill confidence in the seller and make your offer stand out. In competitive markets, having a local lender back your offer can make a significant difference when it comes to securing the home of your dreams.
Conclusion
The choice of your mortgage lender is a critical component of your home-buying journey. While big-name banks might initially seem like the most obvious choice due to competitive rates, partnering with a local lender can offer other advantages. I would recommend talking to multiple lenders and banks. There are times when the smaller lender has comparable rates or a special program that may be ideal for you. Your real estate agent should have some excellent recommendations for lenders in your area.