When it comes to purchasing a home, buyers have to put a lot of research and thought into any decision they make. From finding the best fit with a real estate agent, to how much work they are willing to do on move-in day, setting a budget and of course, picking the house itself.
But another aspect deserves just as much thought – where to get their mortgage loan.
With advancements in technology, the options have expanded far beyond the local lender office you drive by on your morning commute to include an almost completely online process that can start from the palm of your hand.
Determining the best route is up to each buyer. What kind of personal experience are you seeking? Are you comfortable reaching out if you have questions? Are you a first-time buyer or are you familiar with the process already? Do you have a complicated financial history that may require more personalized work by a lender?
“No matter where you are at, online or what, the application is all going to be the same,” said Tony Byrne, loan officer and mortgage consultant with Heritage Home Loans in Spokane. Small differences may exist in appearance or approach, but it is the same information being gathered with one end goal, he said.
So what do you want your mortgage journey to look like?
Byrne said he believes a big advantage to going through a local lender is the ability to meet in-person with someone who can walk buyers through the process. “I think having a face-to-face meeting with someone when you’re spending that much money is a big deal to some people … just on a comfort level,” he said.
Regis Hadiaris, Rocket Mortgage product lead at Quicken Loans, said that while the online option doesn’t have the face-to-face capability, once an mortgage application is received, the file is assigned to an individual or small team at the company who will work directly with the client through the entire process.
Stuart Prey, a real estate broker with Prime Real Estate in Spokane, said he is a “huge advocate for a local lender” option.
“I’ve built my business around relationships,” he said. “You have to be able to identify what is important to you and what you want.”
For Prey, one-on-one meetings, knowing the local market inside and out and being available by phone any day of the week are important attributes he looks for when recommending a lender to his clients.
Those are also some of the top services highlighted by local lenders.
Laura A. Wells, senior loan officer and branch manager for Envoy Mortgage, said local lenders are able to understand the market on a more personal level, which is especially important in the underwriting phase.
“We know the difference between the South Hill, Liberty Lake and Francis (Avenue), the age of the home, the school district and the cultures within our own city limits,” she said. “This plays a huge part in market analysis. … It all has to do with understanding our community, our culture, our demographics and making sure you combine that with all the qualifications every lender requires so that you receive the best service.”
For those going the online route, data and local appraisers are used.
“There is a really great amount of property data and information out there that we can use. …We have local appraisers in every area of the country, as well,” said Hadiaris, adding that as the largest home lender in the country, Rocket Mortgage is also collecting its own information to help customize mortgage solutions for buyers in specific regions.
Hadiaris also said another misconception about online mortgage lending is that it is only online.
“The way we have built Rocket Mortgage if at anytime you want to stop the online process and work over the telephone or chat, you can do that and then go back. You can do as much online or off-line as you want,” he said. “The experience of understanding mortgage options online is still pretty intimidating today.”
While their approaches are different, both online and local lenders have the same goal in mind.
Byrne, at Heritage Home Loans, said one of his biggest concerns about homebuyers going the online route is that they will get turned away when they could be approved elsewhere.
“That is embarrassing for them, so they just disappear from the market,” he said. “There have been many times I’ve seen approvals in my office that had been turned away before. Your credit may not be there now, but we can work with you to see how to fix that over time.”
Adds Envoy Mortgage’s Wells: “We look at the potential. We don’t look at individuals as numbers. A good loan officer never says no, they say not yet.”
Hadiaris said that at Quicken Loans, the company understands that everyone’s financial situation is different and can get complicated. There are going to be times, either because of issues in financial situations or more complicated financial situations, the applicant is going to be contacted by a live lender to work through the process, “even if they’d rather do everything online,” he said.
He said there is flexibility though, as Rocket Mortgage’s online product also allows users to go through a variety of different options, such as loan lengths from eight to 30 years.
“Even when the options aren’t what was expected, they appreciate the clarity and insight we provide,” Hadiaris said.
Prime Real Estate’s Prey said he also encourages his clients to do their own research when it comes to picking their lender. Due to the nature of online, online lenders are a lot more business-driven and may have lower costs, he said. Local lenders can try to match those, he said, which can help to “keep people honest.”
He also said buyers should look into who will be holding their loan after a period of time. Prey said a lot of smaller lenders will sell the loan, while larger companies often hold them themselves.
“When you’re looking for a good lender, trust your agent and those who have gone through the process,” he said. “Look for those who have a consistent basis of good experiences.”
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