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Home Loans: What are the 3 types of lenders and why it matters.

Preparing For The Appraisal In A Declining Market

Other than choosing a home this IS the next most important step. A poor lending choice can cause a lot of problems for you and I’ve seen it play out in real time.
I’ve seen sellers reject offers and escrows crumble to pieces because the buyer chose the wrong lender. So it’s really important to choose your lender wisely.


Big Banks
Online Lenders
Direct Lenders

Big Banks

Big Banks are the ones you see on every street corner, grocery store, and ATM. These are the banks where you deposit your money, pay bills, and cash checks.
The benefit of using a big bank is that they often have the best rates. However, these interest rates usually come at a cost.

But big banks have a lot of work to do when it comes to customer service, response times, organization, and speed. Big banks usually don’t work on nights and weekends. They also have multiple people touching your account, which means there’s no single point of contact when things go array.
These factors not only create slow response times, they also have the potential to create confusion during the transaction when buyers need clear answers and have hard deadlines.

Online Lenders

Online lenders are the ones you see advertising at the top of Google when you start searching for a home loan.
The benefit of using an online lender is that they usually have decent rates and they’re lightning fast when it comes to delivering pre-approvals. Speed is their appeal.
But there’s a reason why they’re so fast…. Online lenders are like factories. They deal with cookie cutter loans like a champ, but if you need extra counseling or if you don’t fit neatly into their wheelhouse, then they aren’t the best option for you.

Direct Lenders

These are the ones that are a little harder to find, but they’re usually local, familiar with our market, and work with a lot of local Realtors®. As a result, they have a very informative and balanced view of the best loan products for buyers and what it takes to get an offer accepted in this market.

The benefit of working with a direct lender is that they take a consultative approach. They will sit down with you, go over all of the loan options available to you, and help you choose the right program that is going to be most beneficial to you and your unique situation. And since they have a vested interest in closing your loan, they will typically make themselves available on nights and weekends – when you need them most.

The only disadvantage of working with a direct lender is that they aren’t always the ones with the lowest rates. Sometimes, they are, but not always.

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Carrie Ann Kilpatrick

Northeast Florida Luxury Living

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