Online Mortgage vs. Local Community Bank: Which is Best for You?
Skip to main content

Community Center

Online Mortgage vs. Local Community Bank: Which is Best for You?

by Jen Novotny | Aug 13, 2018
Customers who love First National Bank
By: Lori Mihm, Vice President & Real Estate and Consumer Lender, NMLS #: 417437

According to the National Association of Realtors’ (NAR) 2017 Home Buyer and Seller Generation Trends report, more than 74 percent of homebuyers from all generations, and 92 percent of buyers who are 37 years old and younger, frequently use the Internet as a routine source of information in the purchase or sale of a home. Therefore, it makes sense that consumers are considering online mortgage companies to finance their new home.

Is an online mortgage company the next natural step, or would a local community bank be a better fit for you? Let’s take a closer look.

No Matter What, Don’t Choose a Lender Based Solely on Rate

It can be easy to start your lender search based on who can offer the lowest rate, but focusing on price alone can be a race to the bottom. Since you’ll likely be making the biggest purchase of your life, it’s imperative you choose a lender who is knowledgeable, competent and responsive.

In addition, be wary of rates that seem too good to be true. A super low rate may entice you to fill out an application, only for you to find out later that you’re not eligible for that rate due to your credit score or financial history.

Choose Speed and Convenience

Online lenders have a reputation for being faster and more convenient than a traditional bank. Advertising even depicts consumers obtaining an online mortgage approval in less than 10 minutes with several clicks. While that’s a stretch for the majority of borrowers, it is convenient and speedy to apply online.

Web-based lenders aren’t the only places where you can apply online for a mortgage. Local community banks like First National Bank also have online mortgage applications that allow you to apply from the comfort of your home at any time of day or night. You can even provide your financial documents electronically via our secure upload center.

Regardless of how you complete your initial application, closing a mortgage still takes several weeks from start to finish.

Choose Flexibility and Customization

Most online lenders have a wide selection of loan products, but typically they don’t offer much flexibility in terms of whether or not you qualify for a loan, and they may lack the ability to customize a product to find the best fit for you.

Local community banks don’t take a one-size-fits-all approach. Lenders at community banks take into consideration your unique circumstances and find a loan program that best meets your needs. Not only does First National Bank have a wide array of loan products, including VA, USDA rural development and WHEDA loans, we also work with homebuying grant programs that most online lenders don’t offer.

And, if you find you’re not quite ready to purchase a home, lenders at community banks can provide financial counseling to help you get ready. This is not something you’ll find at an online mortgage provider.

Choose Customer Service and Support

Some online lenders receive high marks for their customer service and support, but know that you will be speaking to people who are working out of a call center somewhere else in the country.

For many homebuyers, there simply is no replacement for a face-to-face meeting with a local lender, or the continuity of working with the same person throughout the process. Local community banks like First National Bank excel at providing tailored assistance and serving as trusted advisors throughout the entire mortgage process. Local lenders will be available to answer all of your questions and ensure that you understand what you’re doing so you don’t make a major mistake.

Local lenders also have the dexterity to respond swiftly if an issue arises that has the potential to hold up your mortgage, and quickly help you find a solution so you don’t lose your dream home.

Choose Relationship and Reliability

Local community banks are part of your community and are built upon one-on-one relationships with their customers. Choosing a community bank also means that your money is reinvested in the local economy. Many homebuyers feel more secure choosing an institution that has been around for decades and has a personal stake in the success of the community.

In addition, community bankers don’t see you as just a loan application. They see you as a fellow community member — someone they run into at PTA meetings and Friday night football games — and therefore are personally accountable to you. Community banks make local decisions, and local banks who know you and your situation are more likely to take into consideration your character when approving your loan.

Local, community banking — the kind we provide at First National Bank — is built on the foundation of a lifelong partnership where the interests of all parties are valued. This type of relationship building is just not something that online lenders are set up to provide.

Which is Best for You?

We know we’re biased, but we think a local community bank is the best choice for your mortgage needs. At First National Bank we offer you the speed and convenience that an online mortgage company does, but with the flexibility, customer service and relationship they don’t. While you could make the biggest purchase decision of your life in less than 10 minutes … do you want to?
 

For more information about online mortgages vs community banks, contact one of our consumer lenders today!

Check out today’s rates, use one of our financial calculators, get a home loan quote, or start an application in our Mortgage Center.

If you haven't already, take our mortgage quiz to find out if you're ready to buy a home.