by Laura Kocum
on Thursday, May 17th, 2018 at 5:47am.
In the age of online everything, home buyers may be tempted to use online lenders. These lenders offer online mortgage applications and approvals, and claim to offer the best rates for your home purchase. But they may not be your best option. Karen Wedvick, a mortgage lender at Johnson Bank, explains why local lenders are best equipped to help you with your home purchase. "When buying the biggest purchase of your life, you might want some local advice. There are lots of things that kill deals besides your credit rating and interest rates," she says. Wedvick suggests buyers consider the advantages of a local lender:
1. Local Decision Making. A lender at a local bank is well-versed on the local market. They often approve their own loans (or have underwriters "in-house"), and prepare all the closing documents. This speeds up the process, and helps to get you to the closing table without complications. In addition, a local lender is connected to other resources, like local appraisers and title companies. Appraisers can be key in a market like Madison, where offers are typically exceeding asking price. Local appraisers understand this, and can locate appropriate comparable properties to make sense of your offer. Local title companies are able to expedite the paperwork if last minute snags come up. A local lender can also help you make your offer quickly, potentially even as you attend a showing, while out-of-town lenders can require days to get the paperwork approved. In a fast-paced market like Madison, this can make the difference between getting an accepted offer, or losing out to another buyer.
2. Local Service. A local lender often has much more flexibility to provide service to their clients. For example, they service their own loans, so your payments will always go to the lender you know. They can also help you float down your interest rate before closing, if rates fall after locking in the rate. In addition, they may allow you to budget your own real-estate taxes (and not escrow), which means you keep the interest earned on this account. Another real plus is with home insurance claims. Because they are local, they can provide timely service when you need it most. This local service also gives lenders the ability to complete your mortgage application with lower fees. While online lenders will offer appealing rates, it's important to know their fees up front. "Don't assume all lenders have the same fees," Wedvick says. National online lenders use huge 3rd party service providers that cost more than local providers of the same services. Local lenders often provide much lower closing costs, and work to save you money along the way.
3. Ease of Transition. Your local lender can continue to help you, once the sale is completed. Johnson Bank (part of Johnson Financial Group), for example, offers a full range of financial services, including checking accounts, many types of deposit accounts, investments, wealth services and personal and business insurance products. It can be quite convenient to have all of your financial matters managed at one location. And, it's helpful to have an ongoing relationship with the people managing your accounts.
Wedvick encourages buyers to meet with a local lender before they begin their real estate search. A lender can advise buyers on the best ways to improve their credit and identify the best mortgage program and terms. You can reach Karen Wedvick at Johnson Bank by phone at 608-203-3934 or by email at email@example.com.
NMLS ID: 770831
Loans are subject to credit and property approval, bank underwriting guidelines, and may not be available in all states. Other loan programs and pricing may be available. Certain conditions, terms, and restrictions may apply based on the loan program selected. Property insurance is required; if the collateral is determined to be in an area having special flood hazards, flood insurance will be required. Private mortgage insurance required on loans with less than 20% down.