Online lenders and “1-800” mortgage companies like to promote the fact that getting a mortgage is as easy as logging onto the internet. And while that’s true when applying for a mortgage, unless the borrowers know the advantages and disadvantages of various loan types, it’s really not to anyone’s advantage to use a lender that doesn’t provide a relationship, especially when you have questions and you will have those.
Unfortunately, lending guidelines can be confusing for someone not in the industry and while that can be true of any industry, getting a mortgage is a commitment and not so much a transaction. When you buy your first home and use a mortgage to finance it, the sale isn’t the sort where you can change your mind later and get your money back. Not only do you want to make the right financing decision you also want to be crystal clear what you’re getting. This is why it’s important to work with a lender who wants to develop a partnership by having a concentration on open communication.
Here are a few things borrowers need to know before selecting a mortgage. How long do you anticipate owning the property? Which is more important, borrowing as much as you can or saving on long term interest? Should you pay discount points with a hybrid? When and how do you lock in your rate? These are just a few of the questions you’ll need answered before embarking on a mortgage search.
But perhaps most importantly is having someone local who can not only walk you through the mortgage process but also be there when and if things go a bit sideways. For example, when you first apply you’ll also be asked to provide income documentation and your credit report will be reviewed. What if there’s a mistake on your credit report? A loan officer committed to your case, can get credit report errors fixed within 24 hours whereas an online lender could leave you on your own to battle with credit agencies and go back to the loan pile for the next mortgage application. An effective lending relationship, means you have a loan officer in your corner from outset, who works to get your application through seamlessly.
A local lender is invested in the community and has a reputation to uphold. An effective lender and loan officers have established relationships with others in the industry including real estate agents. Yes, anyone can use an online lender and work with a customer service representative, but something as important as financing a home should be done by a company who is actively working to develop a relationship between you and the licensed professionals.