When considering where to get a mortgage from, you will end up having to choose between an online option (such as Quicken Loans/Rocket Mortgage and Better.com), and a local lender to help you finance your home.
Benefits of online lenders
Let’s quickly talk about the reasons you may want to go with online lenders.
1. Because they usually have less overhead, they provide cheaper rates.
2. Since they focus on an online experience, they tend to have digital documents and signatures. If you’re someone who hates physical paperwork, this might be a big point to take note of.
3. You don’t want to meet anyone in person, and would rather have an all-online experience. While this may or may not entirely be possible, depending on which online lender you end up going with, you’ll probably have less physical interaction with your online lender than your local one.
Bonus Tip: LendEDU put together this article about the best online mortgage lenders! Included, LendEDU used 12 different data points to show you what is important when considering an online mortgage lender.
Benefits of a local lender
Local lenders might have tarnished their reputation by sticking to older methods of physical paperwork, insisting that you to meet them in person, or slightly higher rates, but there are huge benefits to choosing a local lender.
Local lenders make their business largely through referrals that they generate when they provide you the service that they do. That means that they WANT to see you succeed and ensure you have an amazing experience during the financing process.
You are a real person to them, and they will get to know you by name. They will do everything in their power to hit every deadline and overcome any hurdles in the transaction process for you.
We all know that buying a home is a tricky process. While we can all hope for a smooth process, sometimes things do show up that cause delays in the process. Since a lender plays a crucial role in ensuring quicker and smoother closings, having a local lender who acts as your advocate is very nice to have. We have heard of many horror stories where online lenders end up flaking on a transaction at the sign of complications (you would not like that, trust us).
Furthermore, many local lenders are replacing their older methods, and adopting digital documents and signatures, as well as providing you rates that you might not be able to find even with an online lender because of strong relationships they have in your market.
Also, at Hutsy, we source for the best local lenders for your neighborhood, directly integrate with their entire workflow, and give you the best of both worlds (better process PLUS local concierge service), so you don’t have to make the hard decision of giving up one for another.
So next time you’re thinking of which lender to go with, give your local lenders a serious consideration before you jump the gun to an online alternative.