With talks of recession, increasing bank rates, and inflation, every company is looking at its bottom line to see where they need to adjust to weather the storm. National Lenders or Big Box Lenders typically adjust their workforce, processes, guidelines, and pricing to combat these challenges. These changes almost always hurt borrowers and their lending experience. If you are in the market for a mortgage in this tumultuous financial environment, you may need some help. It would be best if you had an experienced, trustworthy, and accessible mortgage professional who would be with you through every step. Here’s why.

Reasons to consider a Local Lender

Big box lenders typically have a knee-jerk reaction to changes in the financial markets. Mass hirings or mass layoffs are the typical response, depending on which way the pendulum swings. Currently, we are in an environment where large corporations are laying off mortgage professionals by the hundreds and thousands. With these significant job cuts, the workload for each remaining employee instantaneously increases. Heftier workloads create bottlenecks in the process and make it much more challenging for borrowers to get through the lending process. Turn times for documents go from days to weeks, and clients may not even be able to get a person on the phone right away when they need them. This increase in workload and impending layoffs create low morale, which can also impact the level of effort, empathy, and helpfulness. Layoffs are never good for anyone; they simply preserve the company’s margins to stay in business.

However, the employees at First Down Mortgage are mortgage professionals who have been in the industry for 10-20 years each. We have all worked in the corporate environment and left to create a genuinely client-focused lending environment. We love what we do! And we love helping people through the process. First Down Mortgage is a small, independently run firm; we aren’t subject to a larger bank’s constraints regarding our staff. We work with over a dozen lenders and stay up-to-date with their processes. That way, we can ensure that we are working with a partner to get our borrowers to the closing table on time and with as few headaches as possible.

As the market tightens, we will also see stricter lending guidelines. Lenders assess risk differently when the economy hits a recessionary period. It can be more challenging to meet lending guidelines. Clients who work with First Down Mortgage benefit from our relationships with various lenders to determine which one will be most conducive for our borrowers.

Customarily, lenders that work with mortgage brokers have more guidelines than big bank lenders. Big bank lenders often hold the mortgages on their balance sheets, so they assess risk differently. Lenders who work with mortgage brokers sell their loans on the secondary market. However, many still service them after closing, so they often have minimal overlays to the traditional lending guidelines. A mortgage broker is your advocate. They will work with you to find a lender to finance your request.

Often big bank lenders are very black-and-white, and there isn’t a lot of common sense or lenience regarding guidelines. They know if you don’t proceed with them, their phone will still ring with more interested borrowers. At First Down Mortgage, we build our business on referrals. We want you to love working with us and be confident and trusting of the process so that you tell everyone you know how great it was to work with us!

Big bank lenders typically set daily rates based on their preferred margins. It can change throughout the day or day to day based on their appetite. Lenders who broker their loans to mortgage brokers compete for their business. So, they are much more likely to offer competitive rates and incentives. They are still subject to the ebbs and flows of the market. However, they are more in control of their pricing and thus offer more competitive offerings for mortgage brokers’ clients.

Finally, many people look for a mortgage through their local banking institution. It’s their local firm, so it’s more “comfortable.” However, it’s often not the best route for borrowers seeking a mortgage. Borrowers should shop their options and include a mortgage broker as one of their trusted professionals before making a final decision on a mortgage. It’s easy to believe a local bank is giving a reasonable rate based on the client/banking relationship or that “loyalty” earns preferential treatment. However, the reality of the situation is that they manage their processes and offerings based on risk and profits.

Let a mortgage broker be your advocate and get you into the best mortgage for you.