GREAT--you received an offer on your home.
The Buyer's agent presents your Realtor with a pre-approval letter from a lender you think you may have seen on the Internet or from a "reputable" big box bank You take your house off the market, only to find out 4 months later that the buyers cannot obtain or clear a commitment to close By then, you could already have a contract on your next home and have your entire home packed to move. It's a disaster, but one that could have been easily prevented, had the buyers been given the right information from the start concerning monies due. And that's the kind of information that a local Mortgage Banker is likely to supply more often than other types of lenders.
Closing costs in each state are very different; New York State, for example, is the only state in the Country that has mortgage tax which varies in each county and can be a significant amount of money. If the lender is not aware and does not disclose this tax on the Good Faith Estimate, the buyer could be unprepared to pay.
In addition the annual property and school taxes are very different in New York than other areas where they are based on quarterly amounts. If the bank has under-calculated the prepaid amounts and reimbursed tax dollars, the borrower could have miscalculated their cost by thousands of dollars.
It is also very important that a local appraiser be assigned to appraise the subject property, If the appraiser is not aware of the difference between "this side of the track vs the other" you may be put in a position where the sales price can not be supported by the appraisal report. This could possibly kill a deal uniess you, the seller are willing to reduce your price at the 11th hour to mirror this inaccurate report.
Online lenders spend thousands of dollars advertising cost-savings that they achieve by allowing clients to complete their own applications. Unfortunately, more frequently than not. a borrower will misrepresent their situation unintentionally because they simply don't understand the federal guidelines on how to correctly state their information. Online lenders issue pre-approvals strictly on what the client fills into those blanks. There are literally thousands of FNMA/FHA guidelines which need to be considered when completing an application. Most potential buyers who completed their own online
pre-approvals are NOT really pre-approved!
Communication is the key to every successful relationship. Most big box banks have a local salesperson but once the loan is written, the file is shopped to processing central somewhere in the Midwest. The client tries unsuccessfully to communicate with the processor and underwriter but finds there are NO channels of communication open.
On the other hand, working with a LOCAL reputable lender who understands the market, who will meet face to face with clients, hold their hand and explain accurately the details of the transaction, is priceless. Local lenders have local appraisal management companies who will assign the proper value to your home. They will communicate with all parties, including the listing and selling agent, legal council and the borrower in an effort to have a seamless, positive experience for all parties involved in the transaction.
A Mortgage Banker get paid 100% from the lender and since they are acting as wholesale agents. they offer reduced rates with service second to none. When accepting an offer on your home, working with a local lender is only way to have the peace of mind you deserve to have with such an important process.