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Where to Get a Mortgage: Small Banks, Major Lenders, Credit Unions

Posted on: 04/29/2013

When the big guys get backed up, they have a tendency to raise their price, to slow down volume. And that gives other lenders an opportunity, because the consumer thinks, ‘Why would I pay an extra $100 a month?’”It sends a clear message. In order to get the best deal, and to increase the chances for approval, borrowers need to shop around. Bank of America, Wells Fargo and Citi might have the best brand recognition. But that doesn’t mean they offer the best deals.

 Financing Options: Where to Get a Mortgage Loan

 When shopping for a home loan, it’s important that you explore all of your options. This will greatly improve your chances for getting approved. It will also help you find the best mortgage rate possible, given your qualifications as a borrower. Here are some of the places where you can get a mortgage.

 Big Banks Versus Small Banks

 When I mention the word “bank,” you probably think of the big-name lenders you see all over town. This would include Bank of America, Wells Fargo, Citi, Chase, etc. You can certainly apply for a mortgage loan through one of these Fortune-500 lenders. But you should also expand your search beyond the big guys. Brian Hale, CEO of Stearns Lending, said his company’s rapid growth is partly due to their ability to be more aggressive and competitive than the bigger banks.

 So, for best results, you should broaden your search to include smaller banks as well. This includes local, state and regional banks, as well as the lesser-known national mortgage lenders. In many cases, smaller banks are more flexible with their lending practices. They often qualify borrowers the bigger banks turn away. You may also find you can get a better interest rate from a smaller bank than a big one.

 Let me give you an example from my own experience:

A few years back, I applied for a mortgage loan through Bank of America. My wife and I both had excellent credit scores, steady employment, and sufficient funds to cover the down payment and closing costs. But Bank of America wanted us to have additional “cash reserves.” Specifically, they wanted us to have six months worth of mortgage payments in the bank. This ended up being a deal-breaker, and the loan eventually fell through.

Our real estate agent recommended a bank we had never heard of before, a company called PrimeLending. We called them the next day and spoke to a loan officer to explain our situation. He took a look at our credentials and could not imagine why Bank of America would turn us away. He explained that his company did not have cash-reserve requirements for VA borrowers (we were using the VA loan program at the time).

Long story short, we were approved by the smaller lender two weeks later. We also ended up paying less money in closing costs than if we had gone with Bank of America.

This illustrates the key point of this lesson. There are many places where you can get a mortgage loan. You shouldn’t be married to just one source. Explore your options to see what’s out there. It takes time, but it almost always works out to your advantage in the end.

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What Folks are saying about Steve

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My husband and I signed a “Bond for Deed” on our dream home, and had a two year deadline for financing it.

Our loan was such a challenge because of the “Bond for Deed” and we ran into every obstacle imaginable.

Steve was by our side every step of the way and was extremely knowledgeable and caring.

Steve was with us to the very end and had the pleasure of handing us the key to our dream home.

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Liza & Joseph Brown

Disclaimer

Southwest Funding LP (NMLS 32139) is an Equal Housing Lender. This is not a commitment to lend or extend credit. Programs, rates, terms and conditions are subject to change without notice. Terms and conditions apply. All Right Reserved. Steve Lanier NMLS 94837