As you begin your search for a mortgage lender, don’t discount smaller, local entities like banks or credit unions. These small institutions use their funds or funds borrowed from a warehouse to provide loans to their customers. Once you’re familiar with the benefits of choosing a mortgage banker, you might wind up skipping bigger, less personal lenders altogether. 
Choosing a local mortgage lender can offer you several options that aren’t available to larger lenders. Thanks to an intimate knowledge of the local real estate market and regional policies, and the ability to devote time and attention to your application, there’s a whole lot that they can do. More prominent national lenders, on the other hand, need to be efficient. To do that, they are often much more rigid and streamlined in their approach. Here are some of the most important reasons why you should consider using a mortgage banker for your new home loan.
Greater Lending Flexibility
Large lenders are good at processing ideal candidates that fit within the cookie-cutter of their algorithm. Unfortunately, there are plenty of circumstances that might place you outside of that ideal income, debt, and credit score margin. Denials can happen despite being perfectly capable of paying back a mortgage. Small lenders are often more flexible in their approach and willing to invest the time in understanding your circumstances to find the best solution.
Self-employed borrowers with an irregular income or situations where multiple earners in an extended family may be contributing to the monthly note are a bit complex. These circumstances might not merit a second glance from a large lender. If a banker is satisfied that you’ll be able to consistently make the monthly payment thanks to low debt and substantial savings, they may offer you the loan. Similarly, suppose you have bad credit caused by a financial crisis but have other markers that point to creditworthiness, like a stable income and lack of debt. In that case, a small banker is more likely to consider your application.
Since small bankers are in touch with their communities, they can also process loans that lenders might reject for other reasons. Suppose you’re buying a unique property, and it isn’t easy to assess its value because there aren’t any comparable sales. In that case, a mortgage banker can step in and use their knowledge of the market or tap one of the local appraisers that they’ve networked within the past to decide.
Access To Better Interest Rates
Being plugged into the local economy has its perks. Since your mortgage bankers live and work in the communities where you’re looking to buy a home, expect that they’ll have pretty specific knowledge of all of the loan opportunities that are available to you. They may also be able to offer insight into any state or regional programs that might help you secure a lower interest rate and save quite a bit of money.
In addition to having the time to sit down with you and get a deeper sense of your financial situation and long-term goals, mortgage bankers are familiar with these types of programs in your area. They’ll help you sift through which programs will work for you better than any big lender (who probably doesn’t even live in the same state) can. The bottom line is that knowing the ins-and-outs of the local landscape can save you lots of money.
Better Loan Guidance and Advice
Mortgage bankers often take the time to get to know you. Many are also willing to get personally involved in your mortgage loan process. Since these are the people who live and work near where you’ll be purchasing a home, they understand the value of establishing a long-term banking relationship with you. Because of this personal investment in the mortgage application process, local mortgage bankers are more than happy to offer you multiple lending options. They can explore several channels to find the ideal solution to your unique situation, even if that’s beyond their company or the products they offer.
Using a smaller local lender means that you’re also closer to the people who will ultimately decide whether your mortgage will be approved. That usually means a small team that can work closely with you and takes care of you quickly. Suppose there’s work required to properly package your loan to make sure that you get approved, or your lender needs to find a solution to some aspect of qualifying you for your mortgage. A mortgage banker is more likely to go above and beyond to get it done.
More Willing to Negotiate on Terms
If you need an unconventional loan, try a small mortgage banker first. They typically offer specialized loans that fall outside of the reach of larger lenders. An adjustable-rate mortgage with a 15-year lock or financing a three-season vacation property without a furnace or insulation (both of which are usually required for mortgage approval) need products that big lenders don’t offer because they’re just too niche. Similarly, refinancing a home for less than $100,000 isn’t something that large lenders want to waste their time on. Since a mortgage banker has more options at their disposal, they’re more likely to approve you for unique products that will suit your needs.
Faster Loan Closing
Unlike working with a big bank, you won’t be shuffled around by a mortgage banker. Loan officers with larger national lenders will help you prepare your application and then ship it off to an underwriter. The underwriter, which is often far away, will make the final decision on whether you’re approved and decide how much they’re willing to lend you. This process takes time, especially if the underwriter needs clarification or more information to make their decision.
At a small bank, the people responsible for seeing your loan through to approval are close at hand. You’ll be close to the decision-makers who have the final say on your loan. If any clarification is needed, they can head down the hall to co-workers in the same office working for the same company to quickly resolve issues and find solutions. They also get to cut through a lot of the traditional bureaucracy that’s inherent in larger institutions. Less red tape means that your application is processed more quickly, and you get an answer in less time.
Local mortgage bankers are better suited to handle the nuances of the market that they know. They understand the dynamics of their particular area and understand how to prepare for any eventualities, saving you time and allowing you to close faster than a larger lender would.
Many people often choose small, local lenders because they feel secure and trust the bankers that they’ve built relationships with over the years. It’s not uncommon to secure a mortgage from the same people you bank with if, especially if they’ve offered you other types of financial advice before.
Additional Read: How To Become A Loan Officer
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If choosing a smaller, local lender is an option, it’s one that you should consider pursuing. Mortgage bankers at these smaller banks and institutions typically have the time, tools, and corporate culture needed to make securing a mortgage a pleasant experience. Their familiarity with the local real estate landscape can help you swiftly navigate market dynamics and quickly secure approval.
Often, because of the personalized service that these institutions can provide, they can help you get approved for financing with unique financial circumstances outside of what larger lenders find acceptable. Mortgage bankers often have access to more specialized lending products to suit a wider variety of needs than larger lenders tend to have, too. They can also help you find the lowest rates, including any state or regional programs in the area. These opportunities might reduce your monthly payment or help you with the down payment, saving you money.
Finally, mortgage bankers have proximity on their side. Thanks to their size, they can process your information efficiently, without going through as much of the bureaucratic red tape that larger lenders must rely on to streamline their processes. Consequently, you may find yourself moving through the final closing process more quickly, which saves time. Contact A and N Mortgage to learn more about the advantages of choosing a mortgage banker!
A and N Mortgage Services Inc, a mortgage banker in Chicago, IL provides you with high-quality home loan programs, including FHA home loans, 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.
