The choice between a national and local mortgage lender depends on several factors. If you prefer a more personal touch and a view of the local market, a local lender may be the best option for you. However, if you value a wide range of loan options and wide accessibility, a domestic lender may be better suited. Community bank lenders can often approve mortgages that large banks can't approve because of their standard guidelines. Many community banks have different and more comprehensive lending guidelines.
Large bank lenders need to efficiently process large numbers of loan applications; therefore, they must have strict guidelines that allow them to identify qualified borrowers with a minimum of complications. Anything outside of conventional guidelines can be denied. Community bank lenders can often think outside the box and offer greater flexibility when making local loan decisions. Today, you can find mortgage products offered by lenders, banks, and other types of local mortgage providers, some of them with regional or national reach. Still, choosing a local lender may be the right answer.
Local lenders tend to offer better rates, more personalized service, and a commitment to supporting their communities. Both types of lenders offer pre-approval of the mortgage. Pre-approval can sometimes help get your housing offer accepted. However, there are other significant differences between them that could determine which one you consider to be preferable.
For example, you may be able to save time and money at a bank if applying for your mortgage loan is simple. Even if you're a borrower who wouldn't have trouble getting a mortgage, an agent will meet with you (in person or virtually), discuss loan options, highlight comparison points, and help you make an informed decision. Yes, both mortgage brokers and banks can offer some flexibility when negotiating loan terms and rates. Researching and finding a mortgage lender on your own may equal some of the benefits of working with a mortgage broker, but a mortgage broker may have access to more resources.
If your mortgage application involves difficulties, a broker who knows which mortgage lenders are the most flexible can help. Direct lenders, including banks, credit unions and online lenders, use their own money to finance mortgages, which can speed up the mortgage process. It's always smart to compare prices, compare the rates of different lenders, including banks, and work with a mortgage broker who can offer a wider range of options. Mortgage brokers can access a wide network of lenders, which can increase the chances of finding competitive loan rates.
If you pay the mortgage broker, they can't receive any additional compensation from the lender; either you pay or the lender pays. If you're looking for a less common type of mortgage, working with a broker can help you find the right lenders directly. Usually, a mortgage broker will handle paperwork and disputes with lenders on your behalf; a good mortgage broker will save you time and stress. However, it's important to discuss and clarify any potential charges with the mortgage broker in advance to ensure transparency. Mortgage brokers must disclose their fees in advance, so that's something you can ask when looking for a broker.
In general, if your mortgage loan is a simple transaction and your credit history, income, and assets are strong, you may be able to save time and money at a bank.
