Homeowners have a tendency to buy lending products from the largest institutions they can find. Part of the reason is that they might feel that such organizations offer more stability than smaller local ones ever could. In spite of this line of thinking, there’s a good chance that you could get a much better mortgage rate from a local bank and even help protect your investment in the process. Here are 4 advantages of using a local bank to handle your next home mortgage.
1. Regional Banks May Be More Stable
Conventional thinking promotes giant financial institutions as secure, but history suggests otherwise. Quite a few of these have had to accept cash infusions from federal lenders in order to remain solvent. As organizations grow larger, they usually take on more debt to support their growth. Local and regional lending institutions don’t have this problem, so you won’t have to worry about them suddenly changing hands. Considering that there’s a good chance you’ll have your mortgage for a number of decades, it’s good to do business with a group that’s going to be around for the foreseeable future.
2. Some Offer Extra Services
National lenders don’t have much money to invest in innovations, since they tend to loan out everything they have on a regular basis. They have to take on a huge number of mortgages just to keep up. Smaller banks can offer best-in-class financial technology solutions, so they’re a great choice if you want to check your mortgage status remotely. They might provide homeowners with special apps, web portals, or even phone numbers to look at their account status. Ask a loan officer for more information if any of these sounds like something you’d be interested in using while you work to repay your loan.
3. Branches Have Local Staff
Perhaps the best aspect of working with a local bank is the fact that you’ll be able to get in touch with people near you whenever you need some help. Your average savings and loan branch employs a few individuals who are always on staff, so you can get to know them. Over time, they’ll become familiar with your needs and be able to make suggestions about the kinds of financial products that would work best for your specific situation. When something goes wrong, you’ll actually be able to speak with someone in person rather than having to call a hotline that could connect you to a bank representative in a far-off district. Some customers may even prefer to work with local banks since they’re supporting their own region’s economy in the process.
4. Lending Rates Are Lower
Alternative lending institutions can never grow beyond a certain point. In some cases, these operate as functional cooperatives or small joint stock companies owned by just a few investors. As a result, they’re able to charge more reasonable rates compared to what you might find at a national bank. Homeowners who can’t afford their current mortgage might even be able to refinance it with a local organization, since these tend to offer the lowest rates around.
