Getting Your Home Loan from a Commercial Bank

by Kelly Richardson
Loan Page Columnist

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The decision you make concerning the lending source for your home mortgage loan can make a huge difference in your borrowing experience. With so many lending options, it helps to know the advantages and disadvantages of each. Here is a run down of the pros and cons of borrowing from a commercial bank.

Perhaps the first source you think of when considering a home mortgage loan is a commercial bank. Commercial banks are the big dogs of the lending world, as they garner the highest percentage of business. They have the resources to advertise to draw in borrowers. But do you really know how competitive the commercial banking mortgage options are compared to other lenders?

Home Mortgage Loans: Commercial Bank Advantages

If you don't know how commercial banks stack up, here are some advantages and disadvantages of obtaining a home mortgage loan from a commercial bank.
  • » Established: Because commercial banks are squarely established, they can do more for you when it comes to customizing your home mortgage loan.
  • » Reputation: Commercial banks have a good reputation among the general population--you will most likely be referred to them by friends.
  • » Relationship: If you have an established relationship with a commercial bank, they will be eager to keep you as a customer.

Home Mortgage Loans: Commercial Bank Disadvantages

As with any potential lender, commercial banks also have their share of disadvantages for home mortgage loan seekers. You should weigh these drawbacks carefully before selecting a commercial bank for your lending needs.
  • » Rigid Lending Standards: Because a commercial bank is more established, they will most likely have strict lending guidelines that may dictate higher fees than a lender trying to earn your business.
  • » Multiple Approvals: Many commercial banking lenders will require approval of your loan from several levels within the organization. This might translate into a longer loan process.

Determine your financial situation and borrowing needs before you select a lender. Compare commercial banks with a variety of other options to ensure you get the best deal.

About the Author
Kelly Richardson covers the local education and technology scenes in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.

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