Getting a home loan can easily give you a migraine. Not only is it a natural cause for stress, but with the sheer number of mortgage companies springing up around the corner, finding one can be difficult. It can get especially tricky sifting through the fishy ones to get a good deal. Want a primer on the basics so you can start your research from a level playing field? This article is for you.
Let’s get the alphabet out of the way first- you can take a loan from either a bank or a non-bank mortgage company. Both have their unique pros and cons, and using common metrics to compare them can help you gain a larger perspective on both. How is your experience of approaching a bank different from approaching a mortgage company?
Kansas City mortgage companies, like Metropolitan Mortgage Corporation, are known to provide lower interest rates compared to banks. They come with years of experience and have provided impressive, acclaimed service to most customers. Additionally, they’re located in Kansas City, a reasonably priced and pleasant place to buy a home for the first time.
Personalized service
Everyone has a bank account and a bank that they affiliate themselves with. If you have a go-to branch, too, there’s an excellent chance that being in contact with employees at the bank can be of great benefit. They can guide you throughout the mortgage process and help you pick loan options that suit you best. Some banks also have special benefits for existing customers, and if you’re a regular, you’ll most likely enjoy discounted interest rates.
A mortgage company is not a place you visit every day, and this can stress you out if you decide to approach one for a housing loan. But you might want to rethink that; a mortgage company can offer you a much more personalized service compared to a bank. They’ve been in the lending business for much longer and focus on loans more exclusively than a bank does. For a bank, lending is just one of the several ways they work. Because it’s more specialized, a mortgage company can be of more use to you if you decide to push through the discomfort of visiting one for the first time.
Regulatory restrictions
How does the law treat these institutions? Well, it’s no surprise that banks are subject to more federal regulatory and compliance laws. This is a major drawback in approaching a bank for a home loan. If you’re low on credit ratings or have been bankrupt before, you may find it very difficult to get loans from a bank. Additionally, federal restrictions allow banks less variety, and these options may not suit all consumer needs.
Rules also make taking loans from a bank an expensive affair, and the amount can go through the roof if you want to borrow a large sum to begin with.
Mortgage companies are not subject to the same federal regulatory and compliance laws as banks and can offer a bigger buffet to buyers. Most mortgage companies customize loan options based on the buyers’ financial situation and goals. It’s consumer-centered over here, and the relative lack of rules makes the loaning process cheaper too.
Interest Rates
Banks have fixed interest rates which are regulated by federal laws. You can’t bargain with a bank. Also, a bank employee may not always fully know what they’re doing with the loan they offer you since they also have a million other tasks to manage. A bank often charges additional commission apart from its interest rates, which drives many loan-seekers up the wall, especially when the interest rates are already high.
Mortgage companies do not have to follow fixed regulated interest rates. They can evaluate your financial situation specifically and lay out the best options before you. A mortgage company employee is extensively trained in the specific business of lending and is much more likely to present you with the best deal available. You barely pay anything apart from the interest rates. The best part- a mortgage company gives you space to negotiate their offers. It’s quite a package!
Don’t get complacent about deciding who lends you money- your choice can damage your pocket by thousands of dollars if you’re not careful. A mortgage company is cheaper, more efficient, more helpful, more flexible, and provides you a more enjoyable process overall. You know what our verdict is!