Why having a good relationship with ur local bank doesn't matter

[Jay Lo]

I mean in the sense of helping you you get approved for a loan. We sometimes hear real estate gurus say "have a good relationship with your bank, make sure they know who you are, what you do and they know you by name once you walk in the door." Guys, all good relationship that matters is how good you keep your checking account and your credit card with but none of this personal friendship with the people inside matter. You could have your mother working inside and it doesn't help you a bit to get approved.

Here's why... The people inside basically have no say on how your application is handled by the real decision makers. The local people only help you in filling out your application but after they send out your application, your on your own. It is to the people you've never meant and have no clue about who you are that will determine your fate. Your credit report , financial statement and the real estate deal will be priority to them in rejecting or approving your deal.

If you get denied for whatever reason and you go to your local branch with the bad news, they will simply apologize to you for not getting approved but cant and do nothing to overturn that decision. Only you, can make yourself better 3 or 6 months down the road for a better shot at an approval.

My advice: 1)Do keep a good checking account with them. 2)Deposit your rental checks or have your deposit rental checks with them. 3)Open a credit card with them(id even suggest a small $500 secured cc if your credit isnt perfect) 4)You dont need to smile or be overly polite with the local branch people because they cant help you when it really matters.

I welcome all inputs and comments.

[Cassi Justiz]

It depends on how local your "local bank" really is. Also, this applies more for commercial underwriting than for conventional. Conventional loans are still going to have to meet the fannie/freddie criteria, where commercial underwriting has a ton of flexibility and no universal standards. 

There is a local banker that I work with that calls his own shots. It's a one branch bank and he oversees all commercial lending for that bank. He makes all decisions up to a certain dollar amount, and if over that then he has to get a second signature. No board, no committee, no mystery underwriters. He has one in-office underwriter and one loan processor, so they can be fully transparent the whole way through the process. I think that's the kind of local bank the gurus refer to. They can have a loan fully processed and ready to close in 3-5 business days depending on the borrower.