I have always been an advocate of using local lenders. They understand the neighborhoods and some of the nuances of rural real estate like septic systems and wells.
Sometimes a buyer goes with their own gut and gets a online lender or an out of area lender, most of the time it works out, but sometimes not.
I like a lender who is accountable. If I can march into their office to set them straight, they are accountable. If they can meet me at my office after hours they are accountable. If they know I will see them at Realtor functions, the grocery store or church - they are accountable. Online mortgage ghosts and goblins aren't accountable- they just move on to another town that hasn't heard of them.
But back to costing you money:
My partner Allyson has a buyer living abroad who's lender isn't quite up to snuff. They aren't keeping up with the paperwork fast enough to get the loan documents to the escrow office in time for the docs to get sent abroad and then back again. The buyer is the lender's client and they haven't figured out what is necessary to work with this out of area buyer.
In this case, the transaction will get an extension and it will close a few days late. What if the seller had another offer come in or wanted out of the deal?
- The buyer would lose money spent on the home inspection. $300-400
- The buyer would lose money spent on the appraisal $400
- The buyer might lose the Earnest Money $ 5-$10,000 in our market
Of course the worst part is that they could lose the property and then get to start all over. In a market with rising prices and low inventory that's a horrible prospect. What about the lost appreciation? In our market that's 15-20% annually. For a $400,000 property that's as much as $6600 a month!
I always like clients to shop around when looking for a lender. You need to find a good rate, but you also need an honest, hard working, trustworthy lender who is going to get the job done.
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