Articles & Updates
Mortgage Financing Options: The Value of Your Community Bank
During your journey to homeownership, the decision about your preferred lender is a crucial step. Why? Because a house is a significant financial commitment and partnering with the right lender can save you money and streamline the home purchase process.
Having confidence in your mortgage lending partner is essential to your peace of mind since you’ll likely have your mortgage for several years.
Top tips from Consumers National Bank when evaluating mortgage financing options:
- Learn which interest rates are available across lenders
- Look for a lender that provides complete pricing information, including application fees and estimated closing costs (and don’t forget “points”)
- Check for conveniences like automatic bill pay and online banking that simplify your loan management (and other banking functions)
- Find out if the lender has connections to down payment assistance programs
- If you're a first-time homebuyer, review the types of loans the lender has available
- Check reviews about customer satisfaction with the lender online (like Google) or social media
Why Partner with a Community Bank to Buy a Home?
A local community bank like Consumers National Bank is an ideal resource for mortgage financing for several reasons:
- As your community bank, we offer local decision-making and underwriting, which helps to speed up the loan approval process and lowers the cost of financing for your new home.
- You’ll find mortgage loan rates are competitive at community banks like Consumers.
- Our community bankers often have more flexibility with lending options thanks to our local decision making capabilities. We’ll meet with you as the borrower, discuss your unique circumstances and needs, and find a solution that’s acceptable to you and the bank.
What You Need to Know about ‘Big Banks’ and Mortgage Companies for Home Financing
Nationally recognized financial institutions are a common starting point when evaluating mortgage lenders. Here’s what you should know:
- While you may think the large size of a ‘big bank’ gives them additional resources to offer lower interest rates, they don’t always have the most favorable loan programs.
- Borrower qualifications such as credit scores and debt-to-income ratios may also be stricter, which can make loan approval more challenging as a first-time homebuyer or someone with credit challenges.
A company specializing in mortgage financing is another common option when you’re ready to buy a home. But consider this:
- Mortgage companies focus on providing real estate loans and offer borrowers expertise and a wide range of loan types.
- But unlike community banks like Consumers that rely on deposits from local residents and businesses to finance home loans, mortgage companies use short-term credit. If credit availability shrinks, the mortgage company may raise interest rates or restrict lending, which reduces the number of loans they approve.
- A mortgage lender has the right to sell your loan to another financial institution after you close on your home purchase. While the sale of your loan doesn't affect the terms or interest rate, you likely will not have first-hand knowledge of the new company handling your mortgage.
- And finally, if you are looking for a complete financial partner, a mortgage company isn’t able to offer the suite of banking services that you’ll find at a community bank like Consumers - such as checking, savings, business banking services, online and mobile banking (just to name a few).
To learn more about why Consumers National Bank is an excellent partner on your mortgage financing journey, contact one of our lenders today. Our team will talk about your needs and find the right solution for your home purchase.