Funny you mention the “relationship banking” thing—had a similar run-in a couple years back. I figured my local credit union would be more flexible since I’d been with them forever, but when I tried to get a DSCR loan for a duplex, it was like running an obstacle course. They kept asking for docs that didn’t even seem relevant, and every time I thought I was done, they’d come back with something else. Meanwhile, a big national lender (who’d never even met me) just wanted to see my rental income, lease agreements, and some basic tax stuff. The process was way smoother.
I think part of it is just exposure. The big lenders deal with these “outside the box” scenarios all day, so they’ve got systems in place. Local banks might want to help, but if they don’t see a lot of self-employed or investor types, they just default to the strictest interpretation of the rules.
That said, I’ve seen local lenders bend over backwards for someone they know personally—like, actual family friend level. For most of us, though, it’s kind of a coin toss whether you’ll get that “personal touch” or just more paperwork.
I’ve actually wondered about this “relationship banking” thing too. I always thought being a long-term customer would make things easier, but it sounds like that’s not always true. The paperwork with local banks can be wild—my friend tried to get a loan for a small rental property and said it felt like they wanted his life story. Meanwhile, the big lenders just want the basics and move fast. Maybe local places are better if you’re already super tight with someone there, but for most of us, I guess convenience wins out. Still kinda weird, though... you’d think knowing your customer would help, not make it harder.
Yeah, I’ve seen that too—sometimes it feels like the more a local bank “knows” you, the more hoops they want you to jump through. I had a client who’d banked with the same place for 15 years and still got grilled for every detail when he needed a DSCR loan. The big banks can be impersonal, but they move quick and stick to formulas. Local banks might give you some leeway if you’re really tight with someone, but otherwise, all that “relationship” stuff doesn’t always translate into easier approvals. It’s kind of ironic, honestly.
The big banks can be impersonal, but they move quick and stick to formulas. Local banks might give you some leeway if you’re really tight with someone, but otherwise, all that “relationship” stuff doesn’t always translate into easier approvals. It’s kind of ironic, honestly.
Man, I feel this so much. I swear, my local bank knows more about my life than my own family at this point, but when I went in for a refi, it was like starting from scratch. They wanted paperwork I didn’t even know existed. Meanwhile, my buddy went with a national lender, barely talked to a human, and got his approval in like a week. It’s wild.
I get the whole “relationship banking” thing, but sometimes it feels like the only relationship is them asking for more documents. Has anyone actually had a local bank make things easier because they “knew” you? Or is that just a myth they tell at the teller window?
I’ve always wondered about that too. I’ve banked with the same local branch for years, and honestly, it didn’t make my last loan process any smoother. They still ran me through the same hoops as everyone else. Maybe if you’re a big business owner or something, but for regular folks? Doesn’t seem to matter much. The only difference is they remember my dog’s name when I walk in… but that doesn’t help with paperwork.