Online Lenders Or Local Lenders...Who Should You Use??

Real Estate Agent with Keller Williams Realty

Now a days people shop online for almost anything including mortgages. I recently had a buyer come to me who was pre-approved from an online mortgage company (I won't mention the name of the company, however it has a catchy little jingle on tv). I asked him why he didn't go with a local lender and he thought he was getting a better deal online.I also had another buyer ask me if I thought it would be better to shop online for a mortgage rather than meet with someone local. What these buyers are not doing is shopping around to find the best fit lender for them. They automatically think that going online will be a better deal. One problem with this is that buyers are paying application fees and not getting a mortgage and not being able to reach anyone when they need someone. At least with a local lender you can meet with them in person and go over everything together. Even if you don't want to meet or can't meet in person, you can at least talk with them on the phone and know that they are going to be there to talk to. This is also a problem for listing agents. Buyers are handing in prequailification letters for online banks or comopanies that most of us don't know much about or haven't really heard of except maybe the occassional gimmicky sounding commercial on the radio or tv, but are these companies really worth the time, effort and money?

I tell my buyers that they should use the internet to research information on mortgages such as rates, closing costs, what type of service or who locally to use. However, it is more beneficial meeting face to face with a local and trusted loan officer. one you can see, talk to and give your financial's to in person. You know where they are, when they work and when they dont. I feel that it build a better relationship between the buyer and lender and the service provided to the buyer is a lot better. I always tell them to check around with a few local lenders and if one does't look like a good fit, then go to another, but keep it local. However, in the end it is the buyer's decision and I can only suggest or guide them so much, but they will determine what is a better option. I often  have  buyers ask me who I  recommend and I usually give them a list of lenders who I say past buyers have found helpful and tell them to check with all of these and see if one is a good fit for them.  Most of the lenders that I have worked with in the past have been excellent and I feel comfortable putting their names on my list, but I don't know much about online lenders and frankly don't want to. I personally feel that business is conducted better on relationships that are built with people you have met or can meet.


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Sarah, John Rummage
Benchmark Realty LLC, Nashville TN 615.516.5233 - Nashville, TN
Love Being Realtors® in the Nashville TN Area!

I agree. Get information online, but use somebody local. The rates are just as good locally, and you have somebody to call if something goes wrong at closing.


Dec 29, 2010 12:50 AM #1
Karin Lundeen
Keller Williams Realty - Denver Southlands - Centennial, CO
Realtor Centennial Homes For Sale

Bill, I totally agree with you!  Local is better!  Happy New Year!

Dec 29, 2010 12:51 AM #2
Carol Zingone
Berkshire Hathaway Home Services Florida Network Realty - Jacksonville Beach, FL
Global Realtor in Jax Beach, FL - ABR, CRS, CIPS

Local is ALWAYS better, but as we know, sometimes people fall into the rut of believing they can do a better job shopping themselves, and they go online under the pretense that the teaser rate will stay forever.

Dec 29, 2010 12:53 AM #3
Shane R. Kelley
The Kelley Team at Keller Williams Realty - Burlington, VT

I also agree that LOCAL is better.  The loan officer and even underwriters know the area. I've found from my own personal experience, better communication and service throughout the transaction.

Dec 29, 2010 12:59 AM #4
Tony Morganti
RE/MAX Crossroads in Cuyahoga Falls and Stow, Ohio - Cuyahoga Falls, OH
CRS, ABR - Cuyahoga Falls, Stow

This is so true.  Some people who like to price shop everything, including mortgages, overlook the value of service and actually being able to work face to face with someone or in the very least, speak with someone. My experience with online lenders has seldom been positive.  They sometimes promise what they can't deliver at closing, and most frustrating is trying to actually communicate with them.  Keep it local.  I always refer my clients to local lenders who do a good job.  Then we all know they are in good hands.

Dec 29, 2010 01:00 AM #5
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Bill Burke

REALTOR, Residential NH Real Estate Pro
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