Opening a checking account with a new lender??

[Bradley Allen]

Ok, so I'm closing on a townhouse this coming week and the lender I've used (small local bank in that town) has asked me if I want to open a checking account with them.  This is the second time in the past month that a lender has asked me this.  I closed on a condo in a college town 3 weeks ago and used a different lender there who asked me the same thing.   The townhouse loan is a portfolio loan with that bank and the condo loan was a commercial loan.  I told the commercial loan lender that I already had a bank/checking account that I use to run my rental income through so I didn't need another checking account....but when this second lender asked me the same thing it got me to thinking if I should or not.  Maybe they want to see the flow of rental income, etc?  Is this something I should do promote the relationship with the bank?   Has anyone run into this situation before?  Thanks.

[Chris Mason]

Originally posted by @Bradley Allen:

Ok, so I'm closing on a townhouse this coming week and the lender I've used (small local bank in that town) has asked me if I want to open a checking account with them.  This is the second time in the past month that a lender has asked me this.  I closed on a condo in a college town 3 weeks ago and used a different lender there who asked me the same thing.   The townhouse loan is a portfolio loan with that bank and the condo loan was a commercial loan.  I told the commercial loan lender that I already had a bank/checking account that I use to run my rental income through so I didn't need another checking account....but when this second lender asked me the same thing it got me to thinking if I should or not.  Maybe they want to see the flow of rental income, etc?  Is this something I should do promote the relationship with the bank?   Has anyone run into this situation before?  Thanks.

 Commercial banks don't just want to do your mortgage, they want ALL your business. Not uncommon. Recall that we have fractional reserve banking. So if you put $100k in a savings account with them, they might be able to use that $100k as the basis to lend out $500k... and charge interest on it. On my side as a residential lender, we sell to Fannie and the big banks to recoup money to lend to the next family. A commercial bank doing portfolio loans (eg, they will NOT be selling your loan, and it might take 15 years to recoup the amount they lent you in P&I payments) needs to find a way to have the next $500k available to lend to the next person next week, not 15 years from now.