Benefits of local mortgage lenders

3 Replies

Hello, I'm new to the Cleveland area and plan to reach out to local mortgage lenders.  What benefits do you see from using local lenders?  What questions should I be asking to make sure I take advantage of their potential expertise in the local market?

@Luke Terry A local bank or credit union is useful when you have a deal that won't pass muster with a standard loan.

Foe example, I recently sold a condo in a building that has 3 commercial units on the first floor, 7 residential upstairs. Neither FHA nor conventional loans would allow 30% commercial, so I went to a local lender and helped the buyer (who wasn't even my client!) to arrange a portfolio loan.

Those loans don't get sold on the secondary market and aren't subject to the same rules.  The local lender uses their knowledge of the market and value of the property to make their lending decision.

Here are some of the top reasons to use a local lender and probably a local mortgage broker:

  1. The local lender should have several strong real estate agent/broker relationships that can help you hunt for exactly the right property. This is especially valuable if you're considering investment property and/or are new to the area where you are looking to purchase a property.
  2. A mortgage broker will have access and the ability to shop multiple lenders and loan programs. Again, this is particularly valuable if you are looking to purchase an investment property or are self-employed, which is often the scenario for real estate investors. These are two of the most challenging lending scenarios to navigate.
  3. If you are in or getting into the business of real estate investing it is critical to start building partnership and relationships within the community to advantage your investments. A local lender can introduce you to other important relationships, like real estate savvy attorneys, CPAs, property managers, etc.

As for questions:

  1. Can you finance investment properties? How many have you done this year? Last year?
  2. What lenders do you use to finance investment properties?
  3. Can you recommend 2-3 real estate agents that are good at identifying investment properties?
  4. What neighborhoods/communities do you think have the strongest potential for investment? Why?

Hope this helps.

Originally posted by @Luke Terry :

Hello, I'm new to the Cleveland area and plan to reach out to local mortgage lenders.  What benefits do you see from using local lenders?  What questions should I be asking to make sure I take advantage of their potential expertise in the local market?

 Outside of being able to meet them in person there really aren't any. I have worked with & had my clients work with both local & out of state lenders. The local ones are not always better.

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