If it's important to you to meet with lenders face-to-face, a reputable local bank is a good option. Local banks may also have better rates or lower fees than online options. Both types of lenders offer mortgage preapproval. Credit unions are less likely to sell their mortgage.
This is because credit unions lend “internally” to generate ongoing interest income, rather than selling the loan for a single installment. This means that you may have to deal with the same servicer for the life of the loan. Everyone involved in the process, sellers, realtors, and you, the buyer, want the loan to close on time. Local lenders have a better reputation for closing loans on time.
If the closing of a loan has to be extended by one week and extended again after the end of that week, this could cause some stress and uncertainty. In the worst case scenario, if a loan is refused at the last minute after the buyer has already paid a bond, this could cause the buyer to lose their deposit and lose the opportunity to buy their dream home. Because decisions are made locally, you can often get a mortgage approved faster through a local bank or credit union than through a mega-lender. Small mortgage lenders can offer greater flexibility in their lending guidelines and greater responsiveness to their customers.
For example, a large lender may be reluctant to approve a mortgage for an atypical property, such as the original farm, on an area that is now covered by a subdivision. Specialty lenders that only provide home loans, such as Rocket Mortgage or Better Mortgage, are generally included in the category of banks. For example, you can keep your checking and savings accounts at the same credit union or bank that has your mortgage. They may be an extended family in which several people with income contribute to the mortgage payments.
They offer mortgage loans along with other banking products, such as checking and savings accounts and commercial and commercial loans. They may hold on to your “internal” loan, which will give you a slightly lower rate than what mortgage agencies offer. Like mortgage bankers, brokers and online mortgage lenders, banks often sell mortgages to Fannie Mae and Freddie Mac. They're part of your local or regional economy, so they know what's going on there and use that knowledge when approving mortgages.
This is a common strategy for buyers looking to avoid private mortgage insurance, which is very expensive. On the other hand, a mortgage company can offer quick closures, product availability, and experience in loan originators. To get the best of both worlds, get loan quotes from at least one broker and bank when looking for a mortgage to see which one can offer you the best deal. By submitting your information, you agree that Mortgage Research Center may provide your information to one of these companies, which will then contact you.
So, you might want to take a closer look at small mortgage lenders to make sure you don't overlook the advantages they can offer. Small mortgage lenders can be credit unions, community or regional banks, or any of a number of non-bank lenders. Better Mortgage has developed strong relationships with dozens of investors, from Fannie Mae to most of the largest banks and insurance companies in the United States. .
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