The type of lender you choose can make or break the sale of your next home. I’ve seen sellers reject offers and escrows crumble to pieces because the buyer chose the wrong lender. So it’s really important to choose your lender wisely. In this article, I’ll show you how it’s done!
There are 3 types of lenders in this world…
- Big Banks
- Online Lenders
- Direct Lenders
All About Big Bank Lenders
Big Banks are the ones you see on every street corner, grocery store, and ATM. These are the banks where you deposit your money, pay bills, and cash checks on Christmas.
Big Bank Pros
The benefit of using a big bank is that they often have the best rates. However, these interest rates usually come at a cost.
Big Bank Cons
But big banks have a lot of work to do when it comes to customer service, response times, organization, and speed. Big banks usually don’t work on nights and weekends and have multiple people touching the account all at once. These factors not only create slow response times, they also create confusion in the transaction when buyers need clear answers the most.
If a seller needs to close escrow and be out of their house as soon as possible, depending on a big bank to get their act together could be a deal-breaker for that seller. So if you happen to be lured in by an unbelievably low-interest rate, just know that a seller may frown upon your decision, and everyone in the transaction may have a few more gray hairs when it’s all over.
All About Online Lenders
Online lenders are the ones you see advertising at the top of Google when you start searching for a home loan.
Online Lender Pros
The benefit of using an online lender is that they usually have decent rates and they’re lightning fast when it comes to delivering pre-approvals. Speed is their appeal. When you fill out one of their forms online, they’re usually calling the second you’ve hit submit.
Online Lender Cons
But there’s a reason why they’re so fast…. Online lenders are like factories. They deal with cookie cutter loans like a champ, but if you need extra counseling or if you don’t fit neatly into their wheelhouse, then they aren’t the best option for you.
If you have any extenuating circumstances, an online lender may not be the right choice for you. This includes first time home buyers, buyers with short sales and foreclosures on their records, or buyers who’ve served in the military.
All About Direct Lenders
Direct lenders are my favorite. These are the ones that are a little harder to find, but they’re usually local to the Inland Empire, familiar with our market, and work with a lot of local realtors. As a result, they have a very informative and balanced view of the best loan products for buyers and what it takes to get an offer accepted in this market.
Direct Lender Pros
The benefit of working with a direct lender is that they take a consultative approach. They will sit down with you, go over all of the loan options available to you, and help you choose the right program that is going to be most beneficial to you and your unique situation.
Direct lenders also excel in the area of customer service. The direct lenders that I work with answer their phones at night and on weekends – And have saved a transaction or two in the process. For some reason, things always tend to unravel after hours when you need your lender the most.
Another benefit of working with a direct lender is that they are personally vested into each transaction. So they are very good about making sure that your loan closes. Direct lenders will often speak to underwriting before they promise to lend and get approval first. In the eyes of an eager seller, choosing an offer with an underwriter’s approval attached is a no-brainer.
Direct Lender Cons
The only disadvantage of working with a direct lender is that they aren’t always the ones with the lowest rates. Sometimes, they are, but not always.
If you need an out of the box loan, down payment assistance, or have served our country – A direct lender is probably the way to go. Not only can they come up with creative ways to get you into a new home, they can also make your lender package more appealing in the eyes of a seller, and be there to hold your hand until the transaction closes – even on nights and weekends.
How We Can Help…
We work with lots of amazing lender partners. If you’re thinking about buying a home, start with a good lender who can help you determine your buying power and what programs are available to you. Call or text us anytime… Or contact us, so we can send over some recommendations!