IS YOUR BANK THE BEST PLACE TO GO?
You’ve decided to make a move and buy a new home, what’s next? It may seem like a logical step to call your bank. They have your banking accounts and since the Bank has your financial information, the process will be easier. Unfortunately, this is rarely the case. In fact, it is typically a much more streamlined process to obtain a loan through a Mortgage Lender. Banks will have to collect all the same documentation and follow the same guidelines, but a Mortgage Lender is licensed and educated to a degree that is not required for banks and bank employees.
Things to think about:
- Your bank has your deposit accounts on record. They will not have all of the other supporting documentation you will need to provide like, paystubs, tax returns etc….
- The majority of loans are guaranteed by either Fannie Mae, Freddie Mac, or HUD. Then they are bundled into Mortgage Backed Securities (MBS) and sold throughout the globe. To be salable, loans must meet specific guidelines. Banks, Credit Unions and Mortgage Bankers all have to follow the same guidelines. Whether your loan originates at the financial institution in which you bank at or any other lender in America, the documentation requirements are the same.
- Many people falsely assume that if you get a loan through your existing bank, they will hold the loan on their books and can underwrite the file to their own guidelines. Almost all fixed rate mortgages are sold and your bank may or may not hold onto the servicing after closing.
- Mortgage Bankers are all required to take significant hours of education to get their license and continuing education each year to keep it active. Banks are not required to license their Originators. Who would you feel more confident talking to?
Banks are large institutions. It can be frustrating getting anything done quickly. Mortgage Bankers are typically more accessible, nimble, have better communication and value the client relationship.
Banks typically will not provide a real Pre-Approval. A real Pre-Approval requires a certified Underwriter review the loan documents and approve the loan request. Banks usually only issue a pre-qualification letter issued by a Loan Originator. In this tight inventory market, your offer needs to stand out. Sellers and Listing agents prefer offers from buyers that have been fully Pre-Approved. If you want to know more, give us a call or visit our website.
Many Listing Agents have experienced the frustration of working with banks that do not communicate and have last-minute hiccups. In a multiple offer situation, an agent is more likely to recommend the Seller accept a competing offer with a pre-underwritten approval letter before accepting an offer with a pre-qualification.
With the housing market being in the current state, it’s best to work with an experience mortgage lender that will help position you for success and help you avoid any additional headaches when it comes to the home loan process.