When someone first begins to search for a mortgage loan, they might very well be surprised how many choices there are. There are choices for the type of loan program but there are literally thousands upon thousands of places to get one. From sea-to-shining-sea, mortgage lenders promote their products and services from their websites. Aggregator sites list sources for home loans and some may be in the same state while others may be two or three time zones away. However, mortgage loans are not quite the same as getting an auto loan or applying for a credit card. When someone goes online for loan research and to locate a potential lender, a common search phrase might be ‘an FHA mortgage lender near me.’ And here’s why that’s important.

There’s a lot more to arriving at an approval. It’s not necessarily a difficult process but there is much more documentation required for most mortgage programs. For example, getting a credit card doesn’t mean providing income tax returns or bank statements. Conventional mortgages do. So-called ‘non-QM’ loans also present financing options for those with income that doesn’t necessarily come from a monthly paycheck. With a mortgage of any stripe however, it pays to work with someone local. Why?

One of the main reasons is accountability. A local lender or loan officer has a reputation to uphold. They get the bulk of their business by counting on local real estate agents, accounts and financial planners to fill their mortgage pipeline. If one loan runs into a few roadblocks, a local loan officer can fix the problem first-hand. If a loan officer routinely provides poor service, it’s very likely that loan officer won’t be in business for very long. If a loan officer from somewhere that answers a ‘1-800’ number messes up a loan, that loan officer simply moves onto the pile of loan applications and starts over.

There’s no reputation to upkeep. With a local lender, reputation is everything.

A local loan officer can personally meet with an applicant. This establishes a relationship that online lenders simply cannot match. Mortgages have more steps involved in reaching an approval. Lenders establish relationships with mortgage service providers such as appraisers, inspectors and credit reporting agencies. These business relationships form a ‘team’ concept where different providers work together to get a loan past the finish line.

A local lender is also aware of unique loan programs specific to the city, county or state. Many down-payment assistance programs require the lender to reside in the area where the loan is being placed. Such programs ask the individual lender to be approved in advance before marketing their loans to their client base and referral sources.

And speaking of referral sources, when someone asks a friend, coworker or relative if that person knows of any good mortgage companies, it’s the local lender that gets the referral. A local lender on the receiving end of such a referral has earned that status through performance and solid customer service. A lender with offices far away from the local real estate market doesn’t have the opportunity to establish an excellent customer service reputation. Instead, the relationship is merely transactional for a non-local lender. Their business comes from online marketing. A local lender’s business comes from a proven track record of excellent customer service and an array of products both conventional and non-conventional mortgages.