This is the worlds leading source of financial content on the web, ranging from market news to retirement strategies, investing education to insights from advisors.
Forex Forever!

Mortgage Choice: Quicken Loans Vs. Your Local Bank

Author: Jacob Jackson

Since the dot-com boom of the late 1990s, online mortgage companies have becoming an increasingly significant force in the home loan industry. Leading the charge is Quicken Loans, now the second-largest mortgage lender in the country. In 2013 alone, the company extended some $80 billion worth of financing to homebuyers.

Does the growth of players like Quicken Loans mean web-based firms have more to offer than your community bank down the street? Not necessarily. Where you go for a loan is largely a matter of what's comfortable for you – and where you can get the best rates.

Both types of lenders offer mortgage pre-approval: Being pre-approved can sometimes help you have your offer on a home accepted. However, they have other significant differences that could shape which one you find preferable.

Advantages of Quicken Loans

Going with an online lender has certain benefits, especially if you're someone who likes to feel in control of the loan process. The advantages of going with a company such as Quicken Loans include:

  • Convenience – Since the advent of the Internet, Americans are used to doing things on their own timetable. With online lenders, you can start the process by chatting online, visiting a website or talking on the phone – any time of day. Going with a web-based lender is especially handy for those who work long hours and have trouble finding time for personal projects during traditional business hours.
  • Anonymity – Some people prefer to meet with their lender face-to-face, but that's not true for everyone. In fact, many customers like the anonymity of electronic communication, which sometimes makes it easier to open up about one's financial situation.
  • Transparency – One of the benefits of Quicken Loans is that it gives you 24/7 access to an online tool called MyQL that can be accessed either online or via a mobile app, MyQL Mobile. MyQL allows borrowers to access a personalized website where they can – among other functions – check the status of their loan application whenever they want and make sure that any documentation they provide has been received.
  • Selection – Bigger mortgage companies often provide a broader menu of financial products. Quicken Loans is no exception. In addition to conventional fixed- and adjustable-rate mortgages, the company also offers specialized products such as Federal Housing Administration (FHA) and VA loans. Of course, some community banks offer these as well – but it's not always the case.

Benefits of a Local Bank

When it comes to big financial decisions, some people just feel more at ease doing business in person. With Quicken Loans, you're talking to someone working out of a call center that might be in a different part of the country. If you're the type of individual who likes to look people in the eye when getting advice, a local lender might be the best way to go.

Other advantages of going with a brick-and-mortar provider include:

  • Local expertise and connections – Smaller banks argue that there's an advantage to working with people who know the area and sometimes have an existing relationship with the realtor. This can put them in a better position to resolve conflicts during the loan approval process. That's not to say Quicken Loans doesn't do well by its customers. In fact, the company has earned J.D. Power's top spot for customer service an impressive five years in a row.
  • Simplicity – Most people lead busy lives, so there's something to be said for eliminating as many hassles as possible. For example, if you apply for a mortgage at your local bank, you might have the opportunity to manage all your accounts using a single log-in. That can make paying your monthly bill easier, too.
  • Local ties – When you make payments to a nearby bank, there's a good chance it will take that money and lend it to other individuals and businesses in the area. Smaller banks also tend to support local events and charities, thus bolstering the local community.

The Bottom Line

In recent years, online lender Quicken Loans has become known for convenience and strong customer service. But if meeting with lenders face-to-face is important to you, a local bank with a good reputation is a sound choice. For background when considering both alternatives, read Mortgage Basics.

last five articles

#155 How Do IRS Audits Work?

Author: Jacob Harris

The word audits can make you break out in a sweat, but a little understanding about what IRS audits are and how they work may make you more comfortable. Some audits are no big deal but some can be onerous. Identity the type of tax audit that's being conducted so you know what's involved.Corre... see more

#1625 A Quick Guide To Landlord Insurance

Author: Daniel Davis

Novice landlords, renting out a residential property (house, vacation cottage, apartment) for the first time, may assume that their homeowners insurance will cover all the costs in the case of a natural disaster, accident or other damaging event.That's a rookie mistake.Chances are, ... see more

#320 How To Avoid Common Health Insurance Scams & Fraud

Author: Andrew Jackson

Con artists are nothing if not nimble, and the transformation of American healthcare has given them their best opportunity in years to exploit confusion and uncertainty. As always, they have just two ways to make a patsy out of you: They can make you the victim or the unwitting accomplice. Here's... see more

#739 Where to Retire Abroad? Follow Your Fellow Expats

Author: Daniel Davis

People choose to emigrate from the U.S. for many reasons — ideology, family, career, etc. But one of the main reasons people leave is to enjoy their retirement more. Your money can often go farther abroad and there are other benefits as well.Read on to learn about the best countries to r... see more

#674 5 Mistakes to Avoid When Buying a New Home

Author: Jacob Jackson

Buying a new home can be one of the most exciting and equally one of the scariest times in a person's life. Everyone knows that buying a home is a major purchase, but when people hear the phrase "low interest rates," it often pushes them into a purchase decision they might not want. However, list... see more