When making the decision to purchase a home, one of the key components is working with a lender you can trust. There are many great lenders to choose from whether big banks or local lenders. Here are the reasons why I refer local lenders to all of my clients:
- Competitive rates and fees – local providers are just as competitive in their rates and fees and may even provide more customizable options or better rates
- Communication – because local lenders are often smaller organizations, you tend to deal with the same person throughout your entire transaction. Having someone that knows and is familiar with every detail about your account throughout the entire process is important.
- Walk-in service – if you need them or if they need something from you, you can walk into their office. With big banks and online lending this is usually not the case.
- Availability – the local lenders I refer do not work a 9-5 job. There are many instances when my clients and I need them after normal hours and on the weekends. The lenders I refer my clients to are responsive even ‘after hours’.
- Community – local lenders live in our community. Many are involved with and support local organizations and our community. They are residents and neighbors and many have kids in our schools; their reputation and business grow from providing outstanding service. They risk losing more than just business if they do not excel at earning and keeping yours.
If you make the decision to shop lenders, please make sure to make a local lender one of your calls. Shopping for rates worries some folks as they think it’ll negatively impact their credit score. Normally, mortgage shopping is a ‘soft’ hit on your credit. If you’re looking for a mortgage, bureaus usually identify multiple inquiries within a certain time period as just one and they usually identify the fact that you’re comparison shopping by noticing the types of credit lines you’re applying for and the size of your requested loan.
Before shopping, do some research or consult with a trusted advisor or your real estate agent. Shop rates within a short time frame (15-30 days). Steer clear of too much shopping around, be cautious and shop wisely.
And of most importance: once you find a lender, do the following:
- Get a PRE-APPROVAL vs a pre-qualification. You will ultimately need a pre-approval to purchase anyways. Most real estate agents will not show homes without a preapproval; a pre-approval is verification that all documentation has been submitted so that you know what you qualify for prior to house hunting; your offer on a home is stronger with a pre-approval.
- DO NOT MAKE ANY LARGE PURCHASES. Once you have your pre-approval DO NOT buy a car, buy furniture, take a trip that hasn’t already been paid for…NO LARGE PURCHASES. On this note, DO NOT deposit large sums of money into your account w/o speaking with your lender first.