Should I use big banks like chase or small local banks???

Question

My plan is to purchase a small multi family(duplex/triplex/4-plex) and house hack with an FHA loan for my first property this year. I currently use Chase for my personal banking, before I get pre approved for a loan or get a loan I want to know where I should be getting this loan from? What are the pros and cons of big and small banks?

J. Martin · Answer

@Michael O'Connell,

If you're in it for the long term, think a smaller community bank in your area will value your relationship more, especially if you develop it over the long term. They can be more flexible to tailor to your situation in my experience, because the decision-making capacity and exception process is so much closer to the loan officer than a big bank. That relationship could come in really handy when you need it also! (full disclosure: I regulate state-charted banks in CA, outside of your state - largely community banks).

While I understand where @Jacob Sampsonis coming from, I think it depends more on your individual situation, and I'm more with Jeff Beard, what do you think?

Gino Barbaro · Answer

@Michael O'Connell

Hi Michael

it is much easier to work with small banks, and you have a better chance of developing a relationship. Seek out community banks that are trying to grow.  Larger institutions may give you better terms, but can be a pain to work with.

Once you develop that relationship with a local bank and they understand your business model, you can almost guarantee your financing.

Just remember, EVERYTHING is negotiable.  If you don't ask, you won't get.

Gino

Jake Thomas · Answer

I am a bigger fan of small local banks and credit unions. The larger banks are harder to work with and sometimes have more restrictions. Small banks are more flexible and overall easier to do business with in my opinion.

Jeff B. · Answer

I've always found the mom-n-pop, local banks easier to work with.  The BIG NAME nationals don't need your loan as another will arrive in 10 minutes.

Jeff B. · Answer

If you're going to pit one bank against another, don't do this on the basis of 1/4 point interest.  There are other terms that will have more importance in the long run.

Joe Villeneuve · Answer

The correct answer is "yes".

Jacob Sampson · Answer

To me, it doesn't really matter.  Whomever gives the best terms.  I do think there is value in forming a relationship with a local bank but not a HUGE amount of value.

Should I use big banks like chase or small local banks???

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