Big Bank, Online, or Local Lender for Your Mortgage?

When you begin to search for a new home in Edmond or Oklahoma City, an important first step will be talking to a lender about financing the home; the mortgage. The lender you choose will be a big part of the process, but who do you use?

Big National Banks

Most of the National Banks (Bank of America, Wells Fargo, and USAA for example) offer mortgage services. I’m sure you’ve seen their advertisements on TV or heard them on the radio. Here are some of the pros and cons when working with a Big Box Lender:

Pros
  • Name recognition
  • User-friendly systems in place for servicing the loan after the sale
Cons
  • Closing delays are common
  • Inefficiencies
  • Reputation (Did you see “The Big Short”)
  • Rates and fees may be higher
  • No dedicated contact for your transaction
  • Unaware of local bond and downpayment assistance programs
  • Unfamiliar with Oklahoma contract

Online Lenders

In a world of Amazon and Facebook, it’s not surprising to see consumers attracted to online lenders like Lending Tree and Rocket Mortgage (Quicken Loans). They have user-friendly websites that claim to provide a mortgage with just one click. After all, who doesn’t want to get their mortgage while on the couch in their jammies? Here are the pros and cons for when working with an online lender:

Pros
  • Simple application process
  • Rates and fees may be advertised as lower than traditional bank
  • Initial pre-qualification may be easier, less time-consuming to get
Cons
  • You do not know who you are dealing with AKA Buyer Beware
  • Rates subject to change
  • Limited availability to answer questions
  • No dedicated contact for your transaction
  • Unfamiliar with Oklahoma contract

 

Local Lenders and Mortgage Bankers

In the Oklahoma City metro, there are many local lenders and mortgage bankers to choose from (First Mortgage, Cornerstone, and Bank of Oklahoma are a few). These are professionals that you may run into at your kiddo’s soccer game or while having dinner at Lake Hefner. Here are the pros and cons when working with a local lender:

Pros
  • Face to face interaction
  • Accessible to answer questions (especially important if a first-time buyer)
  • In house processing and underwriting can often close faster
  • Knowledge of local bond and downpayment assistance programs
  • Familiar with the state contract and requirements
  • Invested in the area they serve
  • Relationships with other professionals involved in the transaction like the Realtor and closer
Cons
  • Initial application process may take longer to complete
  • Lender may be inexperienced

Don’t just compare rates and fees. Consider the services offered and the time lines promised. Do you have a dedicated individual to call? Does that person communicate in a timely manner? As you proceed through the transaction, those are going to be much more important to you than a slight difference in fees.

You know I’m not one to sugar coat my opinion. I will recommend that you go with a local lender all day and every day. In our area, there are so many outstanding professionals to choose from. Most have easy to use online applications and speedy processes that make it a no-brainer when deciding. If you need a few names to compare, get in touch and I’ll send you the contact information.

 

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