I’ve actually gone through both—tried an online lender for a refi and used a local credit union when I bought my first place. The online process was fast, but when I had a weird question about closing costs, it took days to get a real answer. With the credit union, things moved slower, but they caught a mistake in my paperwork that would’ve cost me later. For me, having someone walk me through the fine print was worth the extra time, especially since I had no clue what half the terms meant back then. Maybe if you’re super comfortable with all the jargon, online’s fine... but I’d rather deal with a little awkwardness upfront than get blindsided at closing.
I’ve been down this road a couple times now, and honestly, I lean toward local lenders for a first purchase, especially if you’re not totally fluent in mortgage-speak. When I bought my second place, I tried one of those big-name online lenders because the rates looked great and the process seemed super streamlined. It was fast, sure, but when it came time to lock in my rate, there were a bunch of little fees that hadn’t been mentioned up front. Took me three days to get someone on the phone who could actually explain what was going on. By then, the rate had shifted and I ended up feeling like I’d missed out.
Contrast that with my first home—went through a small community bank. The loan officer sat down with me and literally walked through every page of the paperwork. There were a couple things I didn’t even realize I needed to ask about, like prepayment penalties and how property taxes would be handled in escrow. It took longer, and yeah, there were more meetings than I would’ve liked, but at least I knew what I was signing.
I get why people go online—convenience is hard to beat. But if you’re new to the process, having someone local who knows the area and can answer questions face-to-face is worth its weight in gold. Not saying online lenders are bad, just that they’re not always as transparent as they seem at first glance. If you’re comfortable reading legalese and don’t mind chasing down answers by email or phone, maybe it’s fine. Personally, I’d rather spend an extra week getting it right than rush through and regret it later.
That’s interesting to hear, especially about the hidden fees with the online lender. I’ve been comparing rates online and it’s honestly overwhelming how many “low rate” offers pop up, but then I start reading the fine print and it’s a rabbit hole. I’m curious—did you find that the local lender’s rates were actually higher, or was it just that the fees were more transparent up front? I keep wondering if I’m missing something by focusing so much on the interest rate and not enough on the closing costs or other stuff buried in the disclosures.
Also, how did you figure out which questions to ask? I’ve got a list, but it feels like there’s always something I haven’t thought of. Did your loan officer bring up things you didn’t even know to ask about, or did you have to dig for those details yourself?
I keep wondering if I’m missing something by focusing so much on the interest rate and not enough on the closing costs or other stuff buried in the disclosures.
I totally get that—when I was shopping around last year, I got fixated on the interest rate too. Honestly, the local lender’s rate was a tad higher, but when I looked at the Loan Estimate, their fees were way more upfront. The online lender had a lower rate but then snuck in all these “processing” and “origination” fees that added up fast.
As for questions, I started with a basic checklist from a homebuyer blog, but my loan officer actually pointed out stuff I hadn’t even thought about—like prepayment penalties and how taxes get handled in escrow. I’d say don’t be afraid to ask what every single line item means... sometimes it’s the small fees that add up and catch you off guard.
Yeah, I ran into the same thing when I refinanced last spring. I thought I was getting a killer deal with a super low rate, but then the closing costs nearly knocked me over. Some of those “miscellaneous” fees felt made up. I’d say it’s worth looking at the total cost over the life of the loan, not just the monthly payment. Learned that one the hard way...
