Can You Get a Better Home Loan From a Bank Or a Non-Bank?

The home loan landscape has changed dramatically since the financial crisis of 2008. In 2010, loan originations from non-bank lenders represented a 10% market share. By 2017, their share skyrocketed to 50%, presenting a new challenge to traditional banks.

Responding to stricter underwriting requirements, bank lenders inevitably had to raise mortgage rates and tighten qualifications, making it harder for people to qualify for a mortgage. Amidst the crisis, non-bank lenders saw a unique opportunity to come to the rescue of mortgage seekers bank lenders had turned away. Non-bank lenders range from large, online institutions like Rocket Mortgage, Quicken Loans, and PennyMac, to small, locally owned businesses.

What advantages do non-bank lenders offer to mortgage seekers that bank lenders can’t match?

Easier to Qualify
Mortgage seekers who have been or would be turned down by banks have a better chance of qualifying for a home loan from a non-bank lender. Even self-employed mortgage seekers have a better chance getting a home loan from an alternative mortgage lender.

Non-bank lenders range from large, online institutions like Rocket Mortgage, Quicken Loans, and PennyMac, to small, locally owned businesses.

Lower Rates & Fees
Compared to non-bank lenders, bank lenders have a short menu of mortgage options and a “one size fits all” approach regarding rates and fees. There is little room for compromise. When mortgage seekers talk to non-bank lenders, they are pleasantly surprised that they’ll be able to save thousands of dollars in mortgage rates and fees over the course of the home loan.

Lower Down Payment Requirements
Banks typically require a 20% down payment on mortgage loans. This higher percentage creates safer, less risky loans for bank lenders since mortgage seekers have so much more to lose should they default. In contrast, non-bank lenders usually require only a 3% to 3.5% down payment. This opens the door for home ownership for first-time buyers and many other people who would be turned away by traditional bank lenders.

Non-bank lenders’ expertise can give you more mortgage options than you ever knew existed, guiding you to the best mortgage option for your situation.

Faster Approval
Non-bank mortgage lenders are nimble and don’t have to deal with the constant red tape banks face all the time. This fast-forward approach shortens the home loan approval process so that mortgage seekers can quickly make an offer on a house they desire before somebody else does.

Non-Bank Lenders Are Specialists
By focusing on one financial service—mortgages—instead of a wide variety of very different services, non-bank lenders are more knowledgeable about all facets of the mortgage business than loan officers at banks. Non-bank lenders’ expertise can give you more home loan options than you ever knew existed, guiding you to the best mortgage program for your situation.
Talk to a mortgage broker in Chicago today and enjoy expert advice about the best non-bank lender for your unique needs.

A and N Mortgage Services Inc, a mortgage broker in Chicago, IL provides you with high-quality home loan programs tailored to fit your unique situation with some of the most competitive rates in the nation. Whether you are a first-time homebuyer, relocating to a new job, or buying an investment property, our expert team will help you use your new mortgage as a smart financial tool.

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