Why use a local lender? Do you want to close on time?
Financing Real Estate – Why you should use a Local Lender over Out of Area, Internet, and National Lenders
When financing a new home, choosing between a local and a national lender is one of the biggest
dilemmas. But we’re here to help clear it out today. Simply put, local lenders are always a better option
than national lenders. Here’s why;
Why use a local lender? A better understanding of the local market.
Local lenders live and operate in the same locality as you. Because of their local presence, unlike
national lenders operating remotely, they have an intimate knowledge of the people in the area and the
housing market. Hence, they can provide the best market insight to you and make suggestions to you
that suit your needs.
In our area, we work with buyers and sellers who wish to purchase or sell a manufactured home.
Manufactured homes are not the same home that was once found 2 or 3 decades ago. These are solid
and very nice homes. A lender like Quicken, for unknown reasons, cannot loan on manufactured. Buyers
often find out later on in the process that Quicken cannot put the transaction together. This is often
costly to the buyer. The buyer may have incurred expenses such as inspections, appraisals….etc. It can
be costly. A local lender understands the landscape and is ready willing and able to make the buyers’
dreams come true. We encourage our clients to use a local lender s compared to an internet lender for
a much smoother transaction.
Easy to reach and communicate.
You can personally get in touch with a local lender to discuss your terms and requirements. They assist
well in clearing up any confusion. Unlike national lenders who are flooded with work, and you may have
to stalk them for an appointment, local lenders stay at your disposal. This saves you from waiting for
hours and days for a reply.
For instance, when a buyer is experiencing lender delays and poor communication they often are left
hanging wondering what is the problem causing the delay. Locally you can walk in and speak to your
loan officer. That service is not possible with the out of area lenders.
Concerned about building their reputation.
Local lenders deal with a relatively smaller market as compared to the national lenders. Under such
circumstances, one unhappy customer can have a significant effect on their reputation. Thus, they are
quite concerned about their integrity and how they are perceived and offer the best to each of their
clients and prospects.
Offer individual attention.
Dealing with a large number of clients requires national lenders to work at a faster pace and move from
file to file quickly. As a result, they fail to offer individual attention. On the other hand, local lenders
provide attention to each and every case individually and try to facilitate their customers as much as
possible. Consequently, local lenders have a higher capability of achieving maximum customer
satisfaction. Locally, customer service is paramount and center stage.
A final reason to use a local lender is they provide cost-effective services.
When buying a house, you might be trading your life-long savings. Thus, even a little reduction in
interest rates or lending fees can help you rebuild your savings. After all, every penny counts! Local
lenders offer far more low-interest rates and lending fees than the national lenders. Therefore, it is best
to work with them and avoid costly delays.
Local lenders have the best local connections when it comes to appraisals, home inspections, and other
services the transaction may require. Often times, the out of area lenders ask the Realtors for advice
and contacts. Recently I ran into this situation whereas an out-of-area lender could not get an appraisal
ordered. I called two appraisal companies and they said they did not have time as they were taking care
of their everyday customers, which would be the local lender. The local appraisers were just too busy
providing good service to local lenders to take on the extra work.
And the most often used reason buyers go to out of area lenders is, “ We are getting a better rate” That
simply is not true. The rate is based on credit scores, debt ratio, and income. Your local lender can
compete and most likely is being very transparent with you. It is at the closing when the buyer realizes the interest rate is really not what was quoted at the start of
I encourage all buyers to shop for the best service you can get and that always starts locally. Seventeen
years of experience is where I am getting this opinion. I welcome any questions, just give me a call at 231-564-2600.
Check out our article on budgeting for success here.