Saturday, July 28, 2007

Grandfather's Advice: Buy Local and Finance Local

I found this article today with what I think is a spot-on take of the consumer's perspective when shopping for home loans on the internet. It is worth reading. The borrower starts by using LendingTree and BankRate to shop for loans via the internet, but ultimately fulfills locally.

I believe my grandfather once told me to buy local and finance local. Hesitant to deal with lenders over the internet, and disappointed in our national banks, I turned to the local banks. Small local banks, the theory goes, know the area they are lending in. Local banks tend to only write loans in their geographic area. They may have more favorable terms since they lack the resources to compete on location and convenience against bigger banks. In my case, this adage turned out to be correct. After doing due diligence by stopping by various bank branches and getting rate quotes, I was up to 15 different offers.

4 comments:

Anonymous said...

The borrower hits the nail squarely on the head Paul. This is the exact solution I created when I built the Cityloans.com local lending network.

Cityloans.com has over 700 local based lending sites and our goal is to allow borrowers to use the internet to find a local mortgage broker or loan officer.

Give us a look at Cityloans.com.

Paul said...

I have seen your sites on the search engines. How do you deliver on the promise to deliver the consumers lead only to a local lender?

Bill Rice said...

I love the concept of cityloans.com, but it seems like the borrower is doing a lot of work to tell you where they live. Why don't you just let them submit and then source them to the local lender? You could easily do the work on the back end with zip codes and city and your distribution engine.

Second question. Do you really have a large enough network to ensure that local placement? With large distributed organizations or net branches you would have to route down to the LO level.

Great concept! I wish you the best and would like to know more about it.

Bill Rice said...

I love the concept of cityloans.com, but it seems like the borrower is doing a lot of work to tell you where they live. Why don't you just let them submit and then source them to the local lender? You could easily do the work on the back end with zip codes and city and your distribution engine.

Second question. Do you really have a large enough network to ensure that local placement? With large distributed organizations or net branches you would have to route down to the LO level.

Great concept! I wish you the best and would like to know more about it.