Local lender or national lender?

Question

What are the benefits of going with a local mortgage lender than with a national lender? (I’m looking to do a cash out ReFi for a down payment on a house to house hack)

Michael Diossa · Answer

Building a relationship with a local lender can certainly have its advantages, such as potentially getting better lending terms and having a more personal connection with the lender.

For multifamily properties, it's important to work with lenders who have experience in commercial lending and are familiar with the unique aspects of this type of investment. Local lenders can often provide this expertise and knowledge, and as you mentioned, the credit committee may consist of individuals who have a better understanding of the local market.

For smaller investment properties, like 1-4 unit properties, working with a local bank that also lends on investment properties and houses to "hack" (i.e. properties that can be purchased, renovated, and then sold or rented out for a profit) can be a good option. As with larger properties, local lenders may be more familiar with the local market and able to provide better terms and advice.

Account Closed · Answer

Real estate is all about networking, you will benefit greatly from building strong connections with local lenders that will benefit you your entire career.

Michelle Crochet · Answer

Hi Nat!

There are several benefits to going with a local mortgage lender rather than a national lender for a cash-out refinance, including:

- Personalized service: A local lender can offer more personalized service and get to know you and your financial situation. They can also offer more flexibility and options that may not be available with a national lender.

- Better understanding of local markets: A local lender may have a better understanding of the local housing market, which can help you get a better deal on your cash-out refinance. They may also be more familiar with local regulations and laws.

- Faster processing: A local lender may be able to process your loan faster than a national lender. They can also be more responsive to any issues or questions that may arise during the process.

- Supporting local businesses: By choosing a local lender, you can support your local economy and small businesses in your area.

Overall, working with a local lender can offer several benefits, including better service, knowledge of the local market, faster processing, and supporting local businesses. It's always a good idea to compare rates and terms from different lenders to find the best deal for your situation. Hope this helps! Best of luck to you :)

Charles Carillo · Answer

@Nat Love

For investment properties, and 5+ multifamily (commercial properties), I prefer to work with local lenders. It is easier to build a relationship with a local lender, and typically, the credit committee is only a few local people who actually live/work in the towns that you are investing in. The best deals in lending I have received (or have seen others receive) are from local banks and credit unions. If you are purchasing a 1-4 unit property, I would search out local banks that also lend on investment properties, and on houses to hack, and see if you can start a relationship there. Relationships are very important with local banks and credit unions.

Alecia Loveless · Answer

@Charles Carillo Totally agree. The local relationships make the deals happen!

Eliott Elias · Answer

Small credit unions typically have better rates, but that is not always the case. The biggest benefit is customer service and the local feel. Other than that nationwide mortgage brokers are able to be pretty competitive and offer similar, if not more products.

Derek Brickley · Answer

Strong fan of a local lender as well!  They will be more likely to know good connections that will help you grow and scale.

Local lender or national lender?

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