For homebuyers seeking the best possible deal when it comes to financing their purchase, the debate about whether to work with a mortgage lender or a bank has been going on for years. But what many don’t realize is that there are actually quite a few advantages to working with a lender, such as access to better rates, personalized customer service, and more diverse loan options. In this post, we will take an in-depth look at why opting for a mortgage lender versus traditional banks may be the smarter decision when you’re shopping around for your ideal home loan package.
About Mortgage Lenders vs. Banks
First and foremost, lenders and banks have different roles when it comes to mortgage financing. Lenders act as the middleman between borrowers and mortgage investors (or funders) who are providing the funds for a loan. Banks are financial institutions that offer mortgage products directly to borrowers.
Why Work With a Mortgage Lender?
Working with a mortgage lender can provide borrowers with several advantages over working directly with a bank. Explore these benefits to determine if a lender is a right fit for your home financing needs:
Mortgage lenders often provide more personal customer service than banks because they are typically smaller operations and can assign a dedicated mortgage specialist to each client. The mortgage specialist will be readily available throughout the entire process to answer any questions or concerns you may have in detail.
More Loan Options
Mortgage lenders offer more loan types than banks due to their connections with multiple mortgage investors and funders. This also provides borrowers with greater flexibility in terms of loan packages and repayment plans, making it easier for them to find one that fits their specific financial circumstances.
By working with lenders, borrowers can benefit from having access to diverse loan options, including private mortgage loans, government-backed loans such as FHA or VA loans, and many other specialized lending products.
Ability to Negotiate Terms
Mortgage lenders may offer more competitive rates than banks because they have the ability to negotiate better terms with mortgage investors, who then pass on the savings to borrowers. Additionally, lenders can provide additional services, such as mortgage refinancing or home equity loans, at discounted rates by choosing them over a bank.
Less Strict Credit Requirements
Because mortgage lenders are in contact with a larger pool of investors, they can provide financing to borrowers who may not qualify for a loan from a bank due to their credit score. This is because lenders are able to match borrowers with mortgage investors that have more lenient credit requirements.
The mortgage process can take a while, but mortgage lenders are able to complete the process more quickly than banks due to their streamlined processes and close relationships with mortgage investors. This can be especially beneficial if you’re in a rush to purchase your dream home or refinance an existing mortgage loan.
Buy Your Dream Home With a Mortgage Lender in Sacramento, CA
Anew Lending is a mortgage lender in Sacramento, CA that offers mortgage financing products tailored to a variety of borrowers. Our team is made up of experienced mortgage professionals who specialize in finding the best mortgage solution to fit your unique financial situation.
Working with a mortgage lender can be an excellent way to save money and secure better terms when it comes to buying or refinancing your home. Give us a call today to get started on prequalifying for your mortgage loan!