Avoid a Loanley Mortgage Process
In today’s market, who you secure your mortgage with matters.
You want to enter the market as a knowledgeable buyer—and the importance of selecting a quality lender is an often-overlooked, but important, factor in the home buying process.
When a buyer gets approved for a mortgage with a “big bank,” it often triggers a red flag to the listing agent representing the seller. The seller seeks confidence to know that the buyer’s loan will be on time and the lending institution has done a thorough pre-approval of the buyer's debt to income ratio. When you use a large bank for your mortgage, you are solely a loan—or should I say, lone—number to them. You won’t have a single point of contact at the bank, and will most likely feel alone in the mortgage process—which is less than ideal in the midst of such a big purchase.
Additionally, big banks typically don’t have local underwriting offices and lack local knowledge on home values in a given area.
Real estate is local, and it always will be.
When a large bank sends an appraiser, who may not be from the area where the house is located and has limited local knowledge, to provide an official home value, how accurate is that appraisal going to be?
Another drawback from using a large bank: the loan processing sometimes occurs in a different time zone. You’d think any complications due to multiple time zones could be easily avoided with a few emails or a Zoom call—but company policy prevents processors from communicating with the buyer’s realtor, even if the buyer gives permission.
Example: A recent Big Bank mortgage error almost held up a settlement for a week. Their underwriting department neglected to review an addendum that provided the buyer with an assist, or funds toward buyer’s closing costs, until the day of settlement.
Benefits of using a local loan consultant
Using a local established loan officer from a mortgage company that really knows your city and county puts you at an advantage when submitting an offer on a home.
Your listing agent can call a local loan officer directly, day or evening, not an 800 number with anonymous representatives, to ask questions about the buyers’ financials. The buyer’s agent also needs to reach loan officers on the weekend, since Saturdays and Sundays are such popular days for buyers to see properties. Good luck trying to reach the loan officer of a large bank or credit union on the weekend!
At companies like loanDepot, CrossCountry Mortgage, and Marathon, the loan consultant not only knows the local housing market, but will be far more accessible to you and will speak on your behalf to boost the listing agent’s overall confidence in you as a buyer, stating your financial strength, completing a pre-approval, pulling your credit score, and verifying your employment.
With big banks, appraisals can be just another roadblock in the home-buying process.
If the property is unique to its geographic area, or the appraiser just isn’t familiar enough with the local real estate market, the appraisal could come up short on value, triggering a “collateral review.” At the big banks, the appraisal sits in a queue for what could be weeks before anyone responds with a definite home value. A delay of this length could cost the buyer a home because the deadline for loan approval, or a mortgage commitment letter, may expire before a home value is confirmed.
There are many factors that go into a great offer on a home. Many homebuyers think about the sales price and down payment without realizing that choosing the wrong lender could cost you your dream home, especially in today’s fast as lightning market.
Pro tip: Ask your lender, how will you help my offer get accepted?
Many listing agents are weary of big banks and online lenders with no local presence, so shopping online for the best rate could make your offer less appealing. And in today’s market, a seller’s real estate agent will most likely present multiple offers to their clients, advising them to go with a high offer, yes, but also advising them to rely on tried-and-true local experts.
A local lender with a dedicated Loan Consultant offering years of local expertise & experience could be the piece of your offer that secures the home of your dreams.
I recommend local lenders & consultants to my clients because of the many advantages above, and because of my lengthy experience with smooth real estate transactions completed with the help of local mortgage professionals.
Post by Gina Wherry with contribution from Maura McDonnell, loanDepot.