Lenders vs big banks

[Jennifer Aubry]

I am interested in purchasing my 2nd property. Preferably a multi fam unit. What are the pros and cons of pulling an application with a larger bank versus an independent lender?

[Marcus Auerbach]

Here is what I see from personal experience as well as from banks that clients bring with them.

The worst: online lenders. Not being able to see a person when stuff hits the fan. Sometimes you can print your own pre-approval letter, no need to show any taxes or paystubs!

Often really bad: national brand retail banks. I have so many horror stories, you would not believe half of them, they seem made up. Its like stand up comendy, just not funny. Sometimes it works out, in particular the combo: perfect client + perfect house. Their process is streamlined for volume and they (succesfully) try to replace loan officers with apps. 

Hit or miss: mortgage brokers. An additional filter and delay in communication. My worst deal last year was with a mortgage broker, they stalled/forgot/delayed the closing 4 times - 11 weeks in total (VA loan). But sometimes they are good.

Best: small local banks or CU, regardless if you are getting a portfolio loand or a 30 year Freddy Mac. They understand the local market, will not insist on a termite letter for a Wisconsin property (we have snow and several feet of frost, but no termites), my client can see them in person, and if I have to, they will see me too

What Buyers usually do NOT consider when choosing a lender: how it makes your offer weaker or stronger in the eyes of the seller. If the seller has not been burnt by bad lenders, most listing agents have been. The lender you choose is a very important part of your team! And how your offer will be perceived!

When I am the listing agent and we have 3 offers, similar price and terms, one with Rocket Mortgage, one with Wells Fargo and one a local Milwaukee lender I know and I have worked with. And then my seller is not sure how to decide and is looking at me...

Now, have I had great smooth deals with all of these? Yes of course. What we measure is % of screw ups. Also, Realtors talk a lot, at least at Keller Williams - so I hear a lot what works and what doesn't!

Lastly: this is important: you have to speak to several lenders. (or ask a good agent who knows all the players) Banks are very different, loan officers are very different. The winning combo is a great loan officer and a great bank. One or the other does not get you across the finish line. 

Personal experience: last year I was shopping for a BLC and (a little to my surprise) have been turned down by several banks, some of them I have currently loans or accounts with, until one lender that I did not expect at all said: yes, of course and offered more than I was asking for. So you do have to put the work in!