Ah yes. The age old question. Which one is better and is there really a difference?
Let me preface this by saying the following: This is my opinion only.
Now let's take a look at a recent scenario one of my buyers faced. As they started their home search, they went online and applied with a national company. They received a pre-qualification letter in the amount of $250,000. Awesome stuff. They were ready to shop and we were ready to show.
As we started the search process, we had a discussion on lenders. They were happy with what they had gotten but we ALWAYS urge our clients to shop around for loans and to look at local lenders. We gave them our list and off they went. They called them, sent in what was needed and they were off to the races.
Or were they?
All three that they called needed a little more documentation - our clients own their own business. OK - that was expected but never asked for by the national guy. When all was said and done, all three local lenders were ready to work with them and pre-qual them for $210,000 and $220,000. That's a lot less that Mr. National Guy. Our local lenders also found local programs that could assist with downpayment and closing costs.
Mr. National Guy favorite line was "You can always get closing costs! Up to 6%!" Well, that's nice and all but here's the problem with that: Tucson, like most of the country, is in a seller's market. Things are tighter than I've ever seen. Sure, it's nice to ask for closing help but we have to be realistic. A recent buyer of ours lost out on two homes. They didn't need help with closing but were insistant on asking. In multiple offer situations, you want that offer as clean as humanly possible. If a seller gets two offers - one asking for closing help and one not asking, you know which one they're probably going to go with.
The bottom line is this: When your agent says to shop lenders and look at going local, it's not because we're good friends with the lender or we're trying to get something from them. It's because they know the local market. They're in it. They see the daily stats. They know what's going on in different neighborhoods. They know what local programs are out there. On top of that is the fact that you don't have to chase down your file in an underwriting department in Florida or Washington State. The file is here. In Tucson.
I think we've convinced our clients to go with a local, even though they can't buy the more expensive house that they had their eye on. As we always tell our clients:
"We're not here to spend your money. We're here to help you spend your money WISELY."