Mortgage: Benefits of Local Banks Versus Large Corporations

Published by julia | Filed under Miscellaneous, Real Estate, Shout Outs

Most individuals trust their banks with their money every day.  These individuals cash all of their checks, pay their bills, and store money at these banks.  These banks are trusted with out finances every day, but they are not usually the place that people think to look for their mortgage.

Large lending institutions have very large advertising teams with a very large budget.  These institutions rely upon people using them to obtain loans and mortgages to survive.  They rely upon people borrowing money and can even make money if they lend to people who cannot afford to lend.  This can be really bad for the individuals but good for the lending institutions.

Local banks do not have the advertising teams to fund the obtaining of the mortgage customers.  They do have a personal relationship with those who have their money in the banks though.  This does not mean they are going to get the business in the mortgage area that the other lending institutes because people often forget about them for the mortgages.

There is a definite advantage to using these local banks though.  The local banks have a personal relationship with the individual.  The individual has an account with the bank beyond the loan that helps to lower the interest rate because the individual has proven an ability to keep money in the bank for considerable amounts of time.  For those who have savings accounts, this can be extremely helpful because it can be proven that one is able to put money away on a regular basis and is not living above their means.

The larger institutions do not have this individual relationship with the borrower.  This leads to a feeling as though one is a number and not a person.  When one is buying a home, this can lead to a feeling that one is not really important and their questions are now viewed as a nascence rather than important.  This can be a very frustrating feeling.

Larger lending institutions also have a tendency to sell the mortgages to other lending institutions.  This can bring in money for the first institution but can make for a lot of confusing for those who are borrowing.  This can also lead to the confusion of who owns the mortgage and who one is really lending from.  This can also lead to the loss of the payments if one sends the payments to the wrong facility.  This is not a problem with the local lending facilities since the payments are still made to the bank and most banks do not sell their mortgages.