Buyer beware. There’s a tempting mortgage rate being dangled in front of your eyes, and it just might come from an e-lender (gasp!) or an out-of-town lender. Here’s why we will always advise you to opt for the local guy/gal:
- Appraisals. Local lenders know who to call upon for accurate appraisals. Banking laws have changed a bit, so an individual appraiser can’t be assigned to your “case”. However, local banks can arrange for a pool of hand-picked, talented, accurate and regional appraisers to handle all of their business. Although one of the “pool” will be randomly assigned to your loan, no matter who you end up with, chances are your appraisal will properly reflect current and local values. Our local banks pay top dollar for appraisals and because of this the folks that work for them can turn things around quickly. Work with an out-of-town/big box lender, and you’ll likely end up with an appraiser who lives 60 miles out-of-town and is willing to accept half the standard fee (somebody else keeping the other half). In other words, you’ll be assigned someone randomly. Trust me, this appraiser doesn’t know that school district A homes command considerably more than school district B. And because the volume of real estate sales is down, appraisers have to work twice as hard for the money- often venturing outside of their comfort zone. Travel costs can eat considerably into their already reduced fees, so a distant appraisal might not get you placed on the top of their list. It’s luck of the draw. Do you really want that puppy mill appraiser placing a value on the home you just fell in love with?
- Accountability. Ever been frustrated with your phone provider (I won’t name names)? One can get the same treatment in the mortgage world. Only, it’s not over a couple hundred bucks, it’s over the biggest purchase of your life! Don’t get me wrong, they aren’t all bad. But if you keep it local, and work with someone who comes highly recommended (hopefully by me), then we have someone to turn to if something goes wrong. I recently slogged my way through a loan with a New Jersey lender where things were delayed by over 2 weeks, costing my client thousands of dollars. Trust me, that New Jersey lender doesn’t care what I think. They aren’t trying to win my business, or impress me. The loan officer who took the application and wrote the pre-approval letter checked out of the deal the minute it went to Underwriting. And guess how much Underwriting cares…
- Timeliness. Jumbo loans can be difficult. And DC/Bethesda/Chevy Chase is a jumbo loan kind of market. Our local lenders are quite accustomed to getting these loans through in a timely manner (actually adhering to the terms of the contract!). Our friends in New Jersey have been good at letting us know how lucky we are just to be talking to them. One of the loan processors actually said to my client “oh, you have a jumbo loan. I haven’t seen one of those go to settlement on time in I don’t know how long…” What! A delayed settlement can jeopardize your purchase.
- Theater of the Absurd. I once had a lender tell me that the sellers had to get rid of a 2nd refrigerator in their house because it was considered “personal property” and had to be removed from the premises prior to settlement. You can’t make this stuff up. Was this a Big box lender following some absurd guideline? You got that right.
My rant is done. I fear I’ve been a little snarky. No doubt, there are economies to be had by working with the big guys. But it’s served up with a side of crazy. Buyers… I’m begging you… keep it local! It will save you energy, time, possibly money, and certainly your sanity.*
*We’ve got a long list of tried and true lenders. Give us a call and we’ll happily share.