Refinance/Purchase: Direct Lender vs. Bank & Selecting The Right Loan Officer.
Making a decision,
regarding the right mortgage professional to help you with your home loan, is
not the easiest thing that someone can do. In fact, it can be quite difficult.
There are so many options, so many places to get a mortgage, so many banks out
there, credit unions, direct lenders, mortgage brokers and so on.
In this post I’ll help you understand some of the differences
between applying for a mortgage loan through a regular bank and through a
direct lender as well as help you understand how to identify the right mortgage
loan officer to work with.
A regular Bank is fairly self-explanatory, a one-stop shop
for all things financial. You can get a car loan, a credit card, a personal
loan, a student loan, open a checking or savings account, and apply for a
mortgage loan. In other words, the bank’s resources are allocated towards many facets
of the bank’s business. On the other hand, a Direct Lender specializes in
mortgage loans only; therefore 100% of its resources are allocated towards mortgage
lending related initiatives.
So what are the most important things to consider when it
comes to refinancing your mortgage or getting pre-approved to buy a home? Turn
times, interest rates, closing costs, mortgage loan options, and customer
service experience are among the top items to consider when making the decision
as to who you select to handle your mortgage refinance or purchase loan
transaction.
In general, direct lenders can provide homeowners a more
personalized experience with much faster turn times and better customer service
than Banks, while also achieving lower interest rates and lower closing costs at
the same time.
Banks are currently averaging 75 - 120 days to process and
close a mortgage refinance or purchase loan transaction while Direct Lenders
are averaging 20 - 45 days.
Personalized Service and Customer Service experience are
very important. While a Loan Officer at a regular bank works with 30 – 50 clients
at a time, a Direct Lender’s Loan officer works with 10 - 15 clients at a time.
It makes a big difference for a homeowner being 1 of 15 clients as opposed to 1
of 30+ clients. When your mortgage loan officer can focus on a smaller group of
clients, it allows for the loan officer to customize all options available as
opposed to providing only 1 option and moving on to the next client. Also, the
number 1 complaint that homeowners have while refinancing or buying their homes
is that they can’t get their loan officer to return their calls in a timely
manner… if you are 1 of 15 clients as opposed to 1 of 30+ clients, then
receiving a returned call timely is not an issue.
So with many direct lenders out there, how do you select the
right one to work with?
This is where the
individual mortgage professional makes the difference. Most reliable direct lenders
have access to very similar mortgage programs such as FHA, VA, Conventional and
portfolio loan products. It's in your best interest to contact and request
customized mortgage loan options from at least 3 direct lenders in order to
make an informed decision regarding who to work with and what particular mortgage
loan option to go with as well. It's important that you feel 100% confident and
comfortable with the loan officer you choose to work with. Based on your phone
interactions with different loan officers, you will find that some loan
officers are far more knowledgeable and trustworthy than others. Ultimately, you
should choose the loan officer with the highest level of integrity who you feel
the most comfortable working with and who you trust to guide you successfully
throughout the mortgage refinance or the purchase loan process without many
headaches.
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