What do you look for in a Lender?

Question

Hi,

What do you look for when working with a Lender?

Do you go to the "big boys" or do you use smaller companies?

What have you found to be the disadvantages either way?

Thanks,

Adrian

Deyl Kearin · Answer

I had lunch today with one of my mentors today who told me to look for a banker that understands "footnotes." What he meant was instead of having a banker that just looks at the numbers on your balance sheet, find one that understands the intangibles like your character, your previous experience, your network, your ability to cope with tough situations. Develop a trust with them and it will come back to serve you!

Jeff Takle · Answer

Adrian,

Another consideration is whether or not you'll be doing multiple deals in the same area.  Local lenders are a lot more likely to deliver what they're promising if they see repeat business potential from you. Internet-based lenders have been very problematic in my experience, except for USAA b/c I have several other insurance / bank accounts with them through the years.  Once you find a good one, IMHO, stick with them. Best to have someone you trust. Even still, I like dcg's advice...watch them closely. They are your partner but it's YOUR money you're dealing with and you need to constantly prod and make sure you're getting the best deal possible.

r/Jeff

Bryan Casteel · Answer

Some great advice from all here.  I have had the best experiences with the small local banks.  These are banks that usually only have 1 or 2 branches and the lending decisions are made by the owner or President of the bank.  You can really develop a strong relationship with these types of banks once you prove yourself with a track record.  It is pretty cool to walk in and they all know you by name.

What I have found around Cincinnati is that the small local banks each have a niche that they service.  One is set up for lending on rehab properties, another on landlord properties (1-4 units) and another on development projects.  These banks specialize so that they can service that niche the best but they don't usually do very well servicing the other niches.

Watch out for bad service though.  I am dealing with a Savings and Loan bank right now on a commercial deal and they are really falling down.  The loan agent I am working with can't get anything straight and it is taking VERY long to get everything through.  I will not be using this lender again because I can get much better service other places.  Remember that they are the lender, but you are still the customer.

Dick Green · Answer

Find someone you know and trust.  Then watch them like a Hawk!

N/A N/A · Answer

Some prefer mortgage brokers while others prefer to go with a loan officer who works with a bank. The difference mainly lies in who will be underwriting your loan. In a larger company, or with a bank,  your mortgage is handled within the firm. With a mortgage broker, your lender looks at several different companies and finds you the lowest rate. Depending on the type of mortgage you are considering, a mortgage broker can be very helpful. However, you have to pay close attention to the good faith estimate on costs, points paid, fees, etc. Mortgage brokers are more likely to charge you higher amounts on these items. But you can also negotiate some of the terms of the loan (particularly the costs which are fixed by the broker). I do find, however, that you are better represented by a lender with a large company or with a bank. There are exceptions to this, but make sure you are always looking at the fine print.