Borrowers have more options as nonbank lenders continue to gain market share in the mortgage world. Non banks are competing more on rates and underwriting than banks have been and that will likely continue.
According to Business Insider Intelligence’s Online Mortgage Lending Report, the top five U.S. Banks – Wells Fargo, Bank of American, JPMorgan Chase, US Bancorp and Citigroup – comprise only 21 percent of total mortgages last year, a decline from 50 percent of their total market share in 2011.
Alternative lenders often have traditional financial products at lower costs. They also seem to have slightly more relaxed eligibility requirements although I don’t have any statistics to back that up. What they definitely do often have is a more expanded digital platform which streamlines loans (although makes it tough to reach a live body with a question.)
Digital lenders such as Quicken Loans (known now as Rocket Mortgage) are popular with young buyers and millennials in particular, which could be another reason for the increase in market share of the nonbanks. Rocket’s market share was about 8 percent as of the third quarter of 2020 which was the last number I could find. Its CEO has said his goal is to increase their market share to 25 percent by 2030.
If you are looking for a loan talk to several sources because there are differences. Your bank or credit union may be a good place to start but also consider a nonbank. You may get the best deal there. If you need referrals let me know. I have several lenders I work with that offer great rates and good service.