There are both benefits and drawbacks in working with non-local lenders when securing a mortgage loan. Shopping around for funding opportunities outside of your area could the best way to get the absolute lowest interest rates and the loan terms and features you need for meeting your short and long-term purchasing goals. Understanding how local factors impact the mortgage process, however, is vital for ensuring that your efforts to shop around don’t hinder your chances of getting the funding you need and the Downtown San Diego condo for sale you really want.
Knowledge of Local Properties
When banks approve mortgage loan applications, they aren’t just approving homebuyers. They’re also approving the properties that these consumers intend to invest in. When a loan pre-approval is issued, this simply means that the buyer’s credit profile has been reviewed and approved. It is still necessary for lenders to review inspections, HOAs, and the title report for the property in question. They’ll also have to order an appraisal report that details the property’s value and condition. Local lenders rely on local appraisal networks, while non-local lenders may not. This can create a problem if there are off-market sales in the area that a non-local appraiser overlooks, leading to a significantly lower appraisal report than anticipated. When opting to work with a non-local lender, make sure that a local appraisal network will be used.
Settlement Fees and Procedures
Local markets have their own vendors and settlement procedures. In California, a single escrow company will handle all aspects of a lender-backed real estate transaction. In New York, however, both buyers and sellers will have their own separate attorneys. There are even location-specific tax rates and customs concerning how property taxes are paid out. If a non-local lender misquotes any of these fees on your loan documents, the entire transaction could fall through. This makes it vital to ensure that a non-local lender is familiar with the transaction fees and customs that are specific to your area before you submit your loan application.
Relationships with Local Real Estate Agents
Local lenders and local real estate agents in Downtown San Diego often have strong relationships that make it easy for buyers to write offers for homes. In fact, they can offer much of the neighborhood-specific advice that many agents share with their clients and can therefore serve as invaluable additions to the buyer’s purchasing team. Non-local lenders should always be proactive in their efforts to stay connected with agents and any other vendors involved in your sale, rather than waiting passively for these professionals to reach out to them. Absent of location-specific knowledge, non-local lenders can add more value to your team by simply working hard to gain and maintain the right connections.
How you collect rate quotes can have a significant impact on whether or not you actually qualify for a loan. Having too many lenders pull your credit report at once can leave a serious ding on your credit profile. Fortunately, you can compare rates without compromising your chances of getting a loan approval. Online quoting platforms will give you the rates of multiple lenders based on just a few, very basic details. Given that online lenders are fiercely competitive, you’ll likely find some of the lowest rates for your profile when using these systems. Best of all, you’ll have the opportunity to make side-by-side comparisons of lenders, without compromising your credit score.
Need a hand navigating the buying process? We’ve been helping clients find properties in Downtown San Diego for over a decade. If you’re still looking, we specialize in East Village, Gaslamp, Little Italy, and Marina District condos for sale. Check out our current properties or give us a call at (619) 649-0368. ')}