9 Reasons to Use a Local Lender When Buying Real Estate in Sonoma County

So, you’re planning to move to Sonoma County. Maybe Petaluma, Guerneville, Sebastopol, or Sonoma. You’ve found the perfect REALTOR® and are ready to get pre-approved so you can start looking for your forever home. Why not start with your bank? It seems so simple, but in the bigger picture, national lenders are not always the best solution.
 
In a competitive market like Sonoma County, it is a good idea to understand the pros and cons of the type of lender you choose. Oftentimes, a local lender can give you a competitive advantage—especially in a multiple offer situation.

Things to Consider When Choosing a Local Lender vs. a National Lender

1. Relationships and past performance are important and can boost your offer

If the listing agent knows the local lender and their track record, there is less uncertainty in the selection process—particularly when it’s a tight race between you and another buyer. The Wall Street Journal published an article showing that “agents want to work with buyers whose lenders know the local market and have a record of getting deals done. That reassures the listing agent and the seller that a sale will close.”

2. Local lenders know the rules that can affect mortgage feasibility and rates in Each City

For example, some properties will not qualify for an FHA due to the condition of the house. Also, many lenders won't work with a home that does not have power or water. Looking for land or buying an investment property? Maybe it is a country property. These things can all affect what type of loan you can get and what type of lender you choose. 

3. Local mortgage lenders often have lower rates than their national competitors

Local lenders can offer lower rates and a more flexible underwriting process than nationwide lenders. So, it’s always a good idea to shop around to see what is available in the area where you are looking.

4. Local lenders may provide faster turnaround on loan and appraisal contingencies

Due to their size and nature, the underwriting process is the main delay for larger banks and lenders. And, in a tight market, a quick close of escrow and shorter contingencies can give you a competitive advantage—improving the odds of getting your offer accepted.

5. You will have a direct line of communication with your lender or broker

Knowing your lender’s direct contact information ensures open and easy communication as well as faster response times. Wouldn’t it be better to have your lender’s cell phone number and email than to go through an 800 number or generic customer service?

6. Local lenders are more likely to have the time and patience to help with your unique needs

Whether you’re a first-time homebuyer, are from out of the area, or just have questions about the process, local lenders are more likely to have the bandwidth to address your concerns than national lenders. Local lenders typically have fewer clients than the big banks, so their focus can be more personal and customized to how you communicate.

7. Utilizing a local broker can be a great way to get the best of both worlds

Local mortgage brokers are able to offer the perks of national banks while using a regional approach. A broker can search out the best types of loans, lowest rates, and costs for you, but they are also local. As a result, they can provide a wider selection of options, but also offer a personal approach and a local touch.

Since they may live and work in the community where you are buying, there is a strong likelihood that other Realtors® in the area know them—which can give you an edge.

8. You can develop long-lasting relationships with local lenders

Building a relationship with a local lender can help you even after you close escrow. You may want to refinance in the future or refer family or friends who are looking to purchase their own homes. 

9. Local account managers can provide more customized experiences

If you’re using a nationwide bank, having a local account manager can help you have a better experience. This allows you to have a local approach alog with the foundation and process of a larger organization.
 
In the end, using a local lender can help you get your offer accepted and can provide a more personalized approach to the mortgage process. While larger banks are still great options, it is helpful to determine what is most important to you. Where is your comfort zone? What is the most important aspect of a mortgage to you? Rates? Closing Costs? Personal attention? Timing? What will be more strategic to help get your offer accepted? 
 
Your REALTOR® can help you answer these questions and, if necessary, help guide you to a lender that fits your specific needs.