We’ve all seen them, heard them, and perhaps ventured down the road to homeownership using them…. What is it you wonder? It is a National Lending Institution. Yup – doesn’t sound fancy or sexy, or remotely exciting. But I can say that there are huge repercussions that can come into play using one lending institution versus another. And most National Lending Institutions are at the bottom of my list. Let me explain.
Mid-October I had a buyer who closed on a Rural Development (RD) loan. It was very exciting in this very competitive market just to get an offer with a Rural Development loan accepted. They typically take 45 days instead of 30 and there is the possibility of sellers needing to make some repairs. But, here we were back in the beginning of June with an accepted RD offer. Wait – did you catch it?…. That we just closed this in October? Yeah, that is true. Not only did it take 128 days to close this loan, through no fault of the buyer or seller, it was the first RD in 14 years where my buyer had to come to the closing with cash because the lending institution’s fees were so exorbitant. In fact, we didn’t have his actual closing figures until ten minutes prior to the closing! As if the 128 days weren’t enough for the lender to get the proper package to the title company to work up the figures for closing at least a day in advance. Not only that but 6 hours before the closing the buyer had been told he would receive a check back at closing in the amount of $110 (typical for RD loans). So, while he was en-route to closing the lender removed an $865 credit they said was due to faulty new software and he had to run to the bank and make up the difference. Thankfully, he had the funds. This same national lender is currently on day 89 for another buyer who will most likely lose the house, her inspection and appraisal fees because the seller is just plain fed up with waiting. These are lenders that I am calling and emailing daily throughout the process. I have spoken to the loan officers, processors, underwriters, regional managers – all to no avail.
In a different situation I had a VA (Veteran) buyer who was using a National Company and 5 weeks into the deal the lender decided their underwriting division was not going to accept the appraisal, despite it being at the value of the home. In this case, I was able to get it all transferred to a local lender and we closed 2 weeks later.
Why am I writing to let you know these scenarios? Well, if you or someone you know is in the market to buy, I want you to have ample information. I want you to know that it is common practice to advertise a super low rate only to find out at closing that you’ve been charged a few thousand dollars up front for that. I want you to know that you won’t have a local contact using a national lender and you’ll likely be speaking to multiple people throughout the country during your loan process. It can be an added headache that isn’t necessary.
My 14 years of experience and closing about a loan every week with my buyers/sellers has given me the advantage of experiencing so many great and not-so-great lending institutions. There are good and “bad” national companies and local companies. The advantage being that as a Realtor™ I have the experience of knowing who/where typically does a great job, which lenders have programs that may benefit particular clients, etc.
If you’re in the market to buy, even if I’m not your agent – I’d suggest you ask for some high quality lending referrals. Realtors™ don’t get perks, bonuses, gifts of any kind from lenders. So, no worries about the reason why an agent would recommend certain loan officers. We do so in order to save you time, stress, potentially thousands of dollars, and even the house. We don’t want you to go through all the work of finding your perfect match only to lose it because your loan officer couldn’t perform in a timely fashion. Granted it is super busy – all lending institutions are taking longer due to increased workloads. But folks, 128 days is NOT acceptable in any fashion, nor is 89. Buyers losing out on their inspection and appraisal fees is also not acceptable. Purchasing a home should be a great adventure! So, when you’re looking to buy – be sure to ask your favorite Realtor™ which local lending institutions have a spectacular track record with their previous clients. We all should be able to provide you with several recommendations of local loan officers ready to serve you and your particular needs in the very best fashion!