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Farmers National Bank Residential Mortgage Lenders

Residential Mortgage, Online or Local Bank: Which is best?

In an increasingly digital world, the financial landscape has witnessed a significant increase in online lending platforms. However, are local bank loans still a viable and advantageous option? Join us in this thought-provoking podcast as we delve into the realm of borrowing and explore the key differences between online loans and the benefits of turning to your local bank for home loans with our guests Amanda and Jo Lea, Vice President of Real Estate Lending and Assistant Vice of President of Real Estate Lending for Farmers National Bank in Illinois.

Our Residential Mortgage Lending Experts:

Amanda Geuns

Amanda Geuns
Residential Mortgage Lender
Farmers National Bank – Prophetstown
(815) 537-2348

Jo Lea Holevoet
Residential Mortgage Lender
Farmers National Bank – Geneseo
(309) 944-0580

Jo Lea Holevoet

[00:00:00.490] – Speaker 1

There’s no doubt about it. The Internet has made it easier for us to purchase almost anything online quickly and without having to talk to another person. But is this a good strategy when it comes to getting a home loan, especially if you’re a first time buyer? Which is better, going online for a loan or talking with your local community bank? To help us better understand the differences and how they can impact the overall home buying process, we’re speaking with two loan officer executives from Farmers National Bank located in Illinois on this episode of Small Business Talks. There are many options in today’s market when it comes to buying a home and getting a real estate loan. Should you go online or work with your local community bank? One should consider all the reasons and not simply just the loan rate, especially when it comes to one of the most important investments you’ll make in your lifetime. To help us better understand these differences and how they impact customers, we’re speaking with Amanda, the Vice President of real Estate lending at Farmers National Bank. Angeli, assistant vice president of real estate lending at Farmers National Bank.

[00:01:14.560] – Speaker 1

Good morning. Welcome to the podcast morning.

[00:01:17.470] – Speaker 2

Thank you.

[00:01:18.440] – Speaker 1

How are you doing today?

[00:01:20.410] – Speaker 2


[00:01:21.390] – Speaker 1

That’s good. We’re going to talk this morning about online versus local banks when it comes to purchasing a home, to getting a loan, a real estate loan I think I’d like to start out with just as a baseline is what should homeowners consider when they’re looking at getting a real estate loan in general? Let’s start there.

[00:01:45.670] – Speaker 2

They should look at the terms and the interest rates and that’s kind of just a given. But they also need to look at the bank itself and the loan officers that they’re working with because it’s going to relate to local appraisers, local title companies. You want to make sure that the borrower is comfortable with all of those people too. And it’s just nice to have the connection between all the local places working together altogether in one. It helps a lot.

[00:02:20.590] – Speaker 3

The loan officer will be able to find out if there’s a better product for you versus a secondary market loan or an in house loan. If there’s different options that we can offer you by having that personal one on one connection.

[00:02:39.730] – Speaker 1

And I’m going to ask right off the bat is what are the differences between a real estate loan from your local bank and, like, Farmers National Bank and let’s say, the online loan companies?

[00:02:50.710] – Speaker 2

I mean, the products themselves aren’t a whole lot different. I mean, Farmers National Bank does offer all the products that you’re going to find at the bigger online banks. We have everything right here. But what you’re going to get here is the fact that we’re going to know you personally and we’re going to know who we’re working with personally. I just had an example, if you want an example, but I just had one that I had a borrower that went to an online service and they were buying a home here in our local area and the whole process was going through until it came time for there was an issue with the well and Septic and the local plumber went out, took a look at it, gave the borrower an estimate of how much it will be to fix it, but said, unfortunately, I’m going to be about three months till I get to it. The online bank immediately said no, we’re not going to do it. They totally stepped away from it. They left the borrower in the dust and said we are not doing this loan because of that issue. So the local attorney’s office contacted Farmers National Bank, contacted me because they knew that we would be more local, we would be more understanding.

[00:04:01.620] – Speaker 2

We knew the plumber, the services, all that. So I actually ended up picking up that loan midstream for the borrower and we’re going to close for her next week on it because I was able.

[00:04:15.250] – Speaker 3

To pick it up.

[00:04:16.420] – Speaker 2

We can work with our local title companies, attorney’s offices and this plumber service. They were able to get it fixed. But it was just nice to know that the local attorney’s office thought of us and knew that we would be somebody better to work with than the online bank she was trying to use.

[00:04:33.720] – Speaker 1

That’s a great example because I’ve purchased two homes, so I know the frustrations of everything that comes up at surprise levels at different areas. So to eliminate that, especially in the financial end of it, would definitely be a positive. On there mentioned types of loans. Maybe you could just cover or talk a little bit about. What are the different types of loans, what are loans that Farmers offers?

[00:04:58.990] – Speaker 2

We offer the 15 year fixed, 20 year fixed and 30 year fixed. Just like a lot of the bigger banks do. The online then the other feature that we have, we keep all of our loans here in our system. We service them all ourselves no matter what product you pick. But if it’s somebody that maybe doesn’t fit that 15 2030 year product, we also have what we call our in house balloon products. We can do a five year, a seven year, a ten year, we can amortize them over a longer period of time if they need it to for payment amounts and such. But it gives us a lot of flexibility because we kind of have our own little portfolio of loans that we can do. But we also have just exactly what the big banks have to with the 15 2030 year fixed.

[00:05:46.430] – Speaker 1

It sounds like you also can help a buyer understand what their options are more to their needs. Am I correct in saying that correct?

[00:05:56.690] – Speaker 2

Yes, definitely.

[00:05:58.450] – Speaker 3

We can sit down with them and go over each product with them in great detail and see if there’s one that they like better than the other and maybe they would feel more comfortable doing an in house loan versus a fixed loan. You start asking them questions, how long are they going to be in that house? Maybe they think it’s just going to be a starter house and only be in there for five years. So they would go ahead and do an in house loan with us, which is less fees and it’s right here with us.

[00:06:33.620] – Speaker 1

In regards to customer service, what do you feel is the bigger differences between a local bank and an online bank?

[00:06:41.870] – Speaker 2

I feel like customer service is if the borrower wants to, they can come in and see us face to face. We offer things that we can do online and through email, but the customer service end of it, if they want to come in and see us, they can. And the fact that we keep the loan on our system, the borrower can always stop in and see us, ask questions to us about their loan balance, information, payments, all of that. They don’t have to get online and look it up. They can call us or they can stop in.

[00:07:16.890] – Speaker 1

Do you feel that? Especially, and I’m going to use the example of a first time buyer, do you find that there’s going to be a lot of questions that it really is better to be able to talk to a person face to face versus an online. What are your thoughts on that? Because it sounds like I know when I bought my first house, there were a lot of questions I had and it was nice to be able to more sit down with somebody versus just be on a computer.

[00:07:40.690] – Speaker 3

Definitely good to do that face to face, especially with those first time home buyers. It’s nice because we can sit down, run all the numbers for them and we have a qualifying worksheet that we can go ahead and print out and show them as to how we came up with our numbers and what their monthly payments are going to be and how those monthly payments are broke down. But it’s also going to include their other monthly payments that they have and they can see how much of their paycheck is going to go to pay their required monthly payments. And it’s just nice to be able to do that face to face because they may have us run some different scenarios. Maybe instead of $10,000 they put down, maybe they put $12,000 down and we’ll show them how much PMI is going to be for the month and how much that adds to the monthly payment. So it is nice to do that face to face and explain all of those terms to them. If they have questions. There’s many of them that don’t understand what PMI is and how to prevent that monthly fee. So it is good that we can sit down with them and run many examples for them.

[00:08:58.250] – Speaker 1

I would think it would also add a trust factor just to me, especially for something as large as purchasing a house. You want to know that you’re making the right decisions and do you feel that like, face to face? Do you ever feel that people feel more comfortable that way or what are your thoughts on that?

[00:09:14.770] – Speaker 2

Yeah, I do because I don’t mind doing it, but I feel like they want more hand holding when it’s their first home and by able to come in here and stop in and see us anytime or call us or text us or whatever. I feel like we’re giving them that handheld service that they need when they’re a first time home buyer and it makes them feel a lot more assured that they’ve got that.

[00:09:40.170] – Speaker 3

It’s a big step buying a home. And if they’ve got somebody right there by themselves, by their side that they can trust, it definitely makes them feel a little bit more comfortable and relaxed about it.

[00:09:52.960] – Speaker 1

But what are some of the past situations where a borrower may have had an issue that a local bank was able to solve using a more common sense approach versus how it would be handled through an online bank? I know you already gave the one about the plumber coming out and giving that is that typical? Does that come across a lot?

[00:10:11.650] – Speaker 2

I have had that situation, yes, many times before. And one of them, too, that I had the situation was I was actually at the title company, and we were closing a purchase. And so you’ve got your title company people there, you’ve got your attorney there, and you’ve got your borrowers there, and something had happened along the way. And, yes, they had contacted us again, and we had made the loan and got everything to come through. And I remember the attorney looking at his client and saying, this is why I tell people to work with Farmers National Bank or local banks, because look what just happened. They were able to get you out of that mess that you were in and we still were able to get you in your home. And the title company, they totally agreed too. They’re like, it’s just so much easier to be able to call you guys up if there is an issue. But it felt good that the attorneys and the title companies both said, this is what we tell people and this is why we tell them that you need to go to your local bank because they’re going to be able to, yes, have a common sense approach, figure this out, and you’re going to get your home.

[00:11:16.630] – Speaker 1

And it’s interesting you should bring up that example because I was just about to ask that there’s other things involved when you buy the house and you just mentioned it. There’s attorneys, there’s title companies, there’s a lot of people you work with. The advantage of working with a local bank, it sounds like that affects the relationship. Whereas if you’re online, if I’m correct in saying this, it seems a bit disconnected. Do they offer it all online or do you have to kind of get your own thing and then you have to kind of work through this all electronically. And that’s where I’m thinking, again, being more working with a local bank, it kind of all works together and also people know each other. Tell me about that relationship, how that works.

[00:12:01.030] – Speaker 2

Well, I think if you’re doing something online, you’re not going to meet with your lender at all. They’re just going to send everything exactly electronically. They’re going to send somebody to your house to notarize your loan documents. You’re not going to see the title company people at all. So to me that is not very personal. And the relationship that you build. Then with the title company and the attorney’s office and the bank, I feel like you got your purchase and then these people come back to you again. If they need something else, a refinance, a second mortgage, something like that, they’re going to come back to you because they’re going to remember that they’ve built these relationships and that the bank has the relationships with the people that we need to make this all happen.

[00:12:48.070] – Speaker 3

The local banks know the title companies procedures and everything that they need. The title companies know what we need and when we need it in a timely manner, the same as the attorneys. The attorneys know how we process things and we know how those local attorneys process things. And when they want stuff, we make sure we get it to them. So everybody’s working together as a team to make sure that this process goes through so that they can purchase their home on the day that they were planning on purchasing their home.

[00:13:23.550] – Speaker 1

My point would be there’s so many different wheels in motion during buying a house and it just seems if everybody knows everybody and like you said, you know each other’s procedures and how you do things, number one, it makes the entire process go smoother. And number two, I would imagine it’s going to fit more to what the buyer’s needs. Are they’re going to be more successful if there are ways of figuring out what things are? Whereas if you do everything purely online, if you miss something you’re done or like you said, they had the one glitch come up and all of a sudden we don’t want to take the loan anymore. So it just seems like there’s a tremendous value in working directly with the bank in your community, like Farmers National Bank, because you know the people, you know everybody involved and that just makes it a much smoother process for people.

[00:14:14.610] – Speaker 2

I would agree with that completely. Yes it is. Because you got to fit the box and check all the boxes when you’re working on something online. Whereas yes, we are going to adjust and we’re going to do things that make sense to us and still get it accomplished.

[00:14:31.440] – Speaker 3

We’re definitely more flexible and hands on and can work through those situations. We may have to just pick up a phone and call the realtor or call the attorney or the title company and ask, hey, can we do it this way instead? And we’ll be able to find a way to work around something.

[00:14:51.870] – Speaker 1

Well, why do people go online to do all this stuff versus going to a bank? Do you hear feedback from people about, well, the online does this or something better than this and something that you can kind of say, well, these are some of the myths. Again, I don’t want to get you into trouble or get you into something you can’t talk about, but that’s kind of the area I want to kind of focus on. What are your thoughts on that?

[00:15:16.470] – Speaker 2

When I’ve asked people that I think the myth is that the online has the better interest rates, which is not true. And I think the other thing they think is that I think the online advertises really cheap closing costs, but they don’t read the fine print. And then once they get into it and realize how much these closing costs are going to be, that’s when they get shocked. Because I think that the online does some false advertising, so to speak, whereas we will tell you exactly what the closing costs are going to be. There isn’t any fine line or anything on that. We give it to you straight up. And honestly, another myth I think that I heard people say, too, is that they’re a little nervous, especially the first time home buyer, people are a little nervous to maybe talk to someone. So I think they think that they’re going to take this online route just to kind of see how this all goes before they sit down and talk to somebody. And those people, I have found, then when they come in and talk to me at a local bank, they’re like, well, this was way more comfortable than I thought it was going to be.

[00:16:24.160] – Speaker 2

I wish I would have done this first. Doing the online, that was just a waste of my time.

[00:16:29.790] – Speaker 3

They also advertise that it’s easy and fast. No real estate loan is going to be fast. It’s going to take time. So they advertise that it’s going to be easy and fast. And again, like Amanda said, there’s a lot of hidden fees with those online loan or those online companies that they don’t disclose up front and you will get all of your fees and the costs up front with us.

[00:17:01.510] – Speaker 1

How often do you hear people that they started online and decided to just come to Farmers National Bank and go ahead and just go?

[00:17:08.970] – Speaker 3

Your route had a handful of customers and they regret that they ever submitted their application.

[00:17:18.030] – Speaker 2

I would say probably about 25% of who we get, I would say thought about the online avenue, went that way and decided, no, that was not going to work for them.

[00:17:32.030] – Speaker 1

I was just curious because I’m wondering if it was more first time home buyers or if it’s somebody that maybe they’ve gone through that process. But again, it would seem almost if you’ve gone through the process, you’d know how much more advantages are of dealing with somebody in person versus something online.

[00:17:46.930] – Speaker 2

Yeah, I would say in my experience, it’s mostly the first time home buyers because they just don’t know where to start and what to do. And then when they actually come in and talk to us, they realize, yeah, this is what we should do.

[00:17:59.530] – Speaker 3

Some of the younger first time home buyers, I think the younger crowd like to do everything online and they’ll try and do something online versus picking up the phone or walking into the bank because that’s just what they’re used to, is everything online. I agree with that.

[00:18:20.030] – Speaker 1

So what does Farmers National Bank offer to somebody that’s just getting started on their first purchase or they’re about to look at a real estate loan? What are some of the things that you offer? Some of the things that you offer to help people?

[00:18:33.650] – Speaker 2

You can go to our website and we’ve got under residential funding, we have our online application right there that you can complete and send it back to us via our website. We have our rates posted for our 1520 and 30 year terms. And we do have mortgage and financial calculators out there that people can use to try and kind of get an idea of what they would be looking at before they even submit the application to us.

[00:19:07.870] – Speaker 1

So thank you very much for all the information that you’ve given us. This has been really enlightening, especially to, I’m sure, a lot of first time buyers, first time home buyers going to leave the last few minutes for you to wrap up and just tell us a little bit more about Farmers National Bank or other reasons why people should look at a local bank versus online banking.

[00:19:28.630] – Speaker 2

Yes, Farmers National Bank, we’ve been around for over 120 years, always been a community bank, and even our branches that we have are in small hometown communities and everybody gets involved in those communities in some way, shape or form. We’re proud of the bank and we are proud of our communities.

[00:19:52.510] – Speaker 3

The loan officers are very supportive of local organizations and they’re actively involved with their families in the communities. So when you’re working with those loan officers, they’re going to be in the communities that you’re moving to.

[00:20:12.210] – Speaker 1

Well, Amanda, Julie, thank you very much for helping us kind of guide us through both online banking versus you’re getting a real estate loan through your local bank. You’ve been very informative and helping us understand more of those things. We will put your web address in the Show Notes so that people can contact you directly. Is there a phone number that people can reach you at?

[00:20:33.900] – Speaker 2

Yes. In profitstown it would be 815-537-2348, Morrison.

[00:20:42.760] – Speaker 3

Would be 815-772-3700 and Geneseel would be 1309-944-0580.

[00:20:55.730] – Speaker 1

Well, again, thank you for all your help and knowledge about about this topic. And again, thanks for being a part of the podcast.

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