It can be tempting to go with an online lender when you’re buying a home. So, not to disparage anybody’s business, but you know, ten times out of ten, if a buyer approaches me and asks me about using an online lender versus a more local or a smaller ‘mom and pop’ or even a smaller bank, I’m always going to recommend the local lender. At NJ EXP Realty, our lead agent Curtis Counts has your back. See our recommendations for buying a home and about lenders​

Using a local lender versus a very large faceless company. You’re going to get better service. Will you get a cheaper rate? You might. And in some cases you won’t. There are several good reasons why it’s always best to go with a local lender instead. Keep reading to find out what they are!

Online Lenders vs Local Lenders is a No-Contest

When a homebuyer approaches me and asks about using an online lender versus more local or smaller banks, I always recommend the latter. Using big faceless companies can be tricky because you’re not sure if they will offer cheaper rates than your usual bank – in some cases this may happen but there are also other factors that come into play such as origination fees, lender fee, schedule fee; you name it! Therefore, in the end it might make them less beneficial overall for buyers looking at their tax records before making any decisions on where to mortgage loans from.

After-Hour House Hunting: Why Online Lenders Fall Short and Local Lenders Succeed

Differences between online and local lenders become readily apparent when you consider the fact that most people do their house hunting after hours and on weekends. If you’re working with a big online lender, you’re not going to have somebody available to answer your call at 7pm on a Monday night. But if you work with a smaller, more localized company, chances are good that you will. This is just one of the many reasons why working with a local lender can be advantageous. Let’s take a closer look.

A BIG Benefit of Working With Local Lenders instead of Online Lenders

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•  You’re more likely to get after-hour service. As we’ve already established, one of the main advantages of working with a local lender is that they are more likely to have someone available to answer your call after hours and on weekends. If you’re trying to make an offer on a house or talk to a listing agent, you don’t want to have to wait until normal business hours to get someone on the phone. With a local lender, you’re much more likely to get the service you need when you need it.
• You can build a relationship with your lender. When you work with a big online company, you’re just another number. But when you work with a local lender, chances are good that you’ll be able to build a relationship with them. This can be extremely beneficial if you ever run into any problems or need some special accommodations. It’s always easier to get help from someone who knows and likes you than from someone who doesn’t.
• You’ll probably get better rates and terms. Local lenders often give better rates and terms to their clients because they know that those clients are more likely to stick around long-term. They also know that if they give a good deal to one client, that client is likely to tell their friends and family about it, which can lead to even more business for the lender. Big online companies, on the other hand, are so large that they don’t need to worry about losing any one customer. As such, they often charge higher rates and offer less favorable terms than local lenders do.

All things considered, it’s easy to see why working with a local lender can be advantageous. If you’re looking for someone who will be available after hours and on weekends, someone who you can build a relationship with, or someone who is likely to give you better rates and terms, then working with a local lender is probably your best bet.

More Outstanding Arguments for Local Lenders against Online Lenders.

There are quite a few more reasons on why people should choose Local Lenders over Online Lenders.

Convenience

One of the main benefits of using an online lender is convenience. You can apply for a loan from the comfort of your own home, and in many cases, you’ll get a decision back quickly. Online lenders also tend to have shorter loan processing times than brick-and-mortar banks. 

On the other hand, local lenders may offer more flexible terms and conditions when it comes to repayment schedules and down payments. They may also be more understanding if you have a history of financial difficulty. 

Communication

Another factor to consider is communication. With an online lender, you may never meet your loan officer in person. This can make it difficult to ask questions or get clarification on certain points of your loan agreement. 

With a local lender, on the other hand, you can develop a relationship with your loan officer and feel confident that they have your best interests at heart. This personal touch can be invaluable when it comes to securing financing for your dream home. 

Customer Service 

Operating primarily online gives online lenders a significant advantage when it comes to customer service. They can handle a larger volume of inquiries quickly and efficiently thanks to automated systems. Online lenders also tend to have longer customer service hours than banks—in some cases, 24/7—so you can always get the answers you need. 

Local lenders typically provide more personalized service than online lenders since they’re working with a smaller pool of customers. This can lead to faster resolutions to problems as well as greater flexibility when it comes to loan terms and conditions. That’s why we personally believe that the fight between local lenders and online lenders is a no contest in favor of Local Lenders.

The EXP New Jersey Real Estate Experts are Here For You

Would you like to learn more? Do you have any inquiries? Our expert agents are eager to help you with your real estate concerns and needs. Contact us to discuss your requirements and find custom solutions tailored just for you.