Throughout the home buying process, consumers are forced to make a lot of choices. Where should you buy a house? Which Chester mortgage broker should you work with? How much should you spend? While the internet has provided solutions for so many businesses, the online mortgage industry is still an up-and-coming sector that some consumers may consider when purchasing a home.
But is applying for a mortgage online really the best solution? And what is the value that a Chester mortgage broker can bring? Buying a home is one of the largest purchases many people make, so it’s important to fully understand the differences between using a local lender and using an online mortgage company.
Pros and cons of working with a local lender(Chester Mortgage Broker)
At Penn Street Mortgage, our mortgage brokers will guide you through the process to ensure no questions are left unanswered and will work tirelessly to ensure you get the best rate possible. Applying for a mortgage can be complicated, stressful, and nuanced. Anyone who has applied for a mortgage knows that the process is filled with lots of paperwork and involves an intense look at your personal finances.
One of the main benefits of working with a local Chester mortgage broker is the face-to-face relationship you can build with a real person versus an online service that can be impersonal or automated. By working with a local lender, you are often given a designated contact or loan officer who will guide you through the process from pre-approval to closing. This person will be your ally in the process and will work with your realtor and help you answer questions or concerns that come up during your transaction. A good lender will work to build trust and relationships, just like a realtor will ensure you fully understand your options and what is required of you.
One of the other key benefits of working with a local lender is the ability for them to shop around for the most competitive interest rate for your purchase. They can examine different loan programs to make sure they find the solution that best suits your need, based on your financial circumstances and the home you want to purchase. This results in saving you money in costs, monthly payments, and in the long term while getting you the best rate possible for your Chester mortgage broker. Local lenders can also be seen as more reliable since oftentimes online lenders will lure consumers in with a low introductory or advertised rate which might not actually be valid after examining all the fine print and requirements. If you decide to work with an online lender, make sure to read all terms and conditions to ensure you have the full context of your loan.
Additionally, there is an added layer of security when working with a local lender instead of an online mortgage provider. If you work with a local broker like Penn Street Mortgage, we can securely take your personal information and then shop for the best programs available. Local lenders are able to offer the best terms in the market and provide value by taking the shopping “legwork” out of their hands. Local lenders like Penn Street Mortgage also will ensure your information is kept private and not sold to other businesses for solicitations.
Online lenders might promise to be more convenient, but if there are extenuating circumstances to your application like being self-employed, or having low credit, you are likely better off working with a local lender that can personally review your documents. This will increase your chances of getting approved and they can help you walk through the process.
Pros and cons of working with an online lender
While online lenders have grown in popularity recently, they still only account for a small percentage of mortgage applications. Online lending certainly isn’t for everyone, but there can be some benefits to using one depending on your particular situation.
If you have been rejected already from a local lender, or have a credit score under 700, online lenders might be a good fit for you, as they often use different underwriting investors than a traditional bank. While you might get approved using an online provider, be prepared that you will likely have a much higher interest rate, which can ultimately decrease your spending power or cost you more in monthly payments. Instead of agreeing to a high-interest rate from an online lender, try and take some time to improve your credit score and then work to get a mortgage at a better rate. This could include paying off credit cards or paying bills on time.
Generally speaking, applying online for a loan can sometimes appear to be a more expedited and simplified process to apply for mortgages. While convenience can be a driving factor in using an online lender, make sure you’re not sacrificing quality for convenience. It can be convenient to upload all your financial documents from the comfort of your home, but it can also pose security risks for your personal information. Ensure your online lender uses encrypted forms or has a strict security policy in place. Additionally, many local lenders now use technology-enabled platforms to digitally upload your documents as well. Gone are the days of sitting in person and going through a large pile of papers!
With an online vendor, if you have a question about a form or don’t understand the instructions, you will likely have to call a 1-800 number that can have limited hours or can be hard to reach. Sometimes delays like this can result in losing the deal, so make sure you are fully aware of the availability and capabilities of your lender — whether using an online or a local lender.
Ultimately, whom you work with matters when it comes to finding a mortgage broker. At Penn Street Mortgage, our team of trusted Chester mortgage brokers can guide you through the home buying process with ease and convenience, providing a hands-on approach that online lenders lack. If you have questions about how to get started or to get pre-approved for your home purchase, contact us today!