Big Banks vs. Local Community Bankers & What That Has to do With Those Free Cruise Calls
Choose your Mortgage ally carefully or forever hold your peace!
Have you ever received a call from an unknown number congratulating you on winning a free cruise? At first, you can’t believe how lucky you are… You start thinking how you never win anything, you’re mentally picking out your bathing suit, and then reality hits! This is just a cruel game and you really didn’t win anything!
Big banks are flashy and offer you most everything you could need and desire. Then, reality hits. Your loan officer isn’t down the street or available at the odd hours you have time to work on a mortgage. The phone number you called has a hold time equivalent to that of a bathroom line at a sporting event and you are reintroducing yourself with every new person that answers your call. And guess what the priority is at that big bank… Well, you would hope it was your potential loan, but history, specifically 2008, says it best and the cruel game begins.
What exactly is a community lender? A community lender is a mortgage lender who, not only has a local presence but, keeps your loan application in-house and not electronically sent to some far-away loan processing center. And, not only is your loan application local, so is your loan officer and your loan processor and guess what… they know your name!
But really, does it matter who funds your loan?
Would you rather be a number or a name?
Big banks are great for accepting deposits, establishing checking accounts, car loans, assisting with investments. They’re so big though that unless you’re worth 7 figures, chances are you’re just a number in an ocean of other numbers. At a local community lender, you are more than a number. You are a name with a dedicated loan officer. Who is ready and willing to guide, educate, and counsel you at the odd times and places that are most convenient for you.
Backed by marketing budgets that look more like a country’s GDP (Insert Don Draper from Mad Men working on a BofA account here), big banks are still doing the bulk of mortgage originations across the country. The process seems straightforward: potential borrowers complete an application, typically online, then the application goes through the standard approval process. How your loan is actually approved at these lending behemoths is where you go from being a name to being a number. For example, let’s say you stop by your local bank one morning and complete a loan application. You sit down with the loan officer who collects the necessary information then tells you it will be a few days before you get a decision. Guess what, your bank’s branch isn’t where your loan is evaluated for an approval! It goes to a faraway land where someone you don’t know gets to play a role in your future. Even if you’ve banked at that same branch for years, the mortgage approval process is now completely sterile and you’re a number in a big rank and file system.
The process can be even worse when working with a lender that has an online-only origination process. You don’t meet with anyone. But instead, call the 1-800 number and walk through the automated instructions to get you to a loan officer. But, guess what!? Typically the person you get isn’t a loan officer, but someone who reads down a list of items needed. If you have a question when you begin reviewing your loan disclosures, you again call up that same 1-800 number, go through the automated process to reach your customer service person, but fiddlesticks, they’re servicing the other hundreds of clients they have and you have to leave a voicemail, and wait for a return call. Let’s hope they’re in your time zone! Does this sound a bit impersonal?
Benefits of Choosing a Community Based Lender
Community lenders focus on building relationships instead of pushing your transaction from start to finish. You’re not a number, but a part of an organization that truly wants to be a friend and resource.
Community lenders are accountable as well as transparent, and they strive to educate and counsel you through the loan process, rather than confuse and push you into a decision just to satisfy a quota. In addition, community lenders know the value of investing in the local community. They have a stake in the well-being of those around them. Privately held, community lenders don’t answer to shareholders yet are large enough to accommodate most any mortgage request pending product availability.
And for those who are civic minded, most community lenders make it a point to sponsor local softball and youth sport’s leagues, they donate and partner with local businesses, charities, non-profits, and fund local community projects from municipal parks to afterschool child programs. There’s a conscious effort to look beyond the individual home loan and actually focus on the community as a whole.
All in all, a community lender wants to provide a service that goes beyond the transaction. They want to be there when you have a question and personally champion your loan’s approval. They want to know your name and be there for you when you have questions. Transparency, accountability, and relationships – that’s the foundation of a community lender.
Big Banks are great for a lot of services. Just be sure to completely understand the process before you start jumping for joy at the deal you were quoted.
*Please note all pricing, percentages and fees are subject to change and are based on personal circumstances. The use of hypothetical statements are meant to illustrate possible outcomes and are not intended to be assurance of qualifying for a loan or a statement of facts.
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