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    | 3 min read

    The Unsung Heroes of Mortgage Lending

    In a vast—and largely digital—lending landscape, big banks and FinTechs often hog most of the financial glory. They’re more visible and have slick advertising that suggests they’re the best and safest bet for a person’s financial future. But there’s an itch larger financial institutions can’t scratch for many consumers. That’s where smaller financial institutions have an opportunity to shine.

    These institutions (think community or regional banks and smaller credit unions) often play an underrated role as preferred lenders, particularly when it comes to home loans, but they have unique qualities that can make them an ideal candidate when it comes to getting the keys to a dream home.

    In this blog post, we’ll examine why these banks shouldn’t be overlooked, explore some advantages they can offer to consumers, and discover why they matter now more than ever.

    Getting Personal with Home Loans

    Small financial institutions that are embedded in the communities they serve are renowned for their personal touch in customer interactions. Unlike their large counterparts, where patrons can feel like little more than account numbers, these banks understand the needs of their community members and prioritize relationship building. When applying for a home loan, this approach can make all the difference.

    Borrowers feel respected, valued, and understood when banks have a clear understanding of their circumstances and their financial picture. Smaller banks can also tailor loan options to them, leveraging a flexibility that big banks simply can’t match. This results in less rigid lending guidelines and a better overall experience from which borrowers walk away with a manageable loan on a home that meets their needs.

    Local Market Knowledge

    Commuters may not look twice at the cozy little neighborhood banks nestled into the fabric of their community, but those banks have a big secret when it comes to realizing borrowers’ mortgage dreams: They have deep insight into their local markets.

    Community banks rely on neighborhood knowledge, housing trends, and local economic conditions when approving mortgages. If a borrower has their sights set on an unconventional property, a smaller lender possibly knows its history and understands the demand for it, making them more likely to underwrite a loan.

    They leverage their knowledge of the local and regional economy to better understand risk, too. While larger banks might see a run-down property in a less-than-favorable part of town, local banks recognize a fixer-upper with great potential in a burgeoning hotspot, where properties are likely to increase in value.

    Not Just Friendly, But Fast and Less Costly, Too

    One of the key advantages of community or regional banks is their ability to make decisions quickly. Unlike large institutions with layers of bureaucracy, small lenders are more agile in numerous ways, with built-in savings due to less overhead and streamlined decision-making processes. When borrowers apply for a home loan with them, they’re likely to receive a faster response, which is crucial in a competitive housing market.

    In a market where timing is everything, this efficiency gives smaller banks a significant edge, allowing would-be homeowners to quickly secure a loan with competitive rates and fees when the right home comes on the market.

    The Biggest Obstacle for Smaller Lenders

    In our digital age of convenience, borrowers and account holders have come to rely on instant access to funds, loan processes, and the ability to make payments anytime, anywhere. However, community banks often lack the cutting-edge tools and software—and the funds to invest in robust technology—that make those things possible.

    Since smaller financial institutions have such vital importance in our lending landscape, SWBC helps level the playing field by giving them access to powerful—yet affordable—technology that streamlines home loan origination while giving borrowers a convenient digital payment solution that simplifies repayment and funds management. By eliminating the manual processes that drain staff time and resources, smaller banks can lean more into what makes them great: Local expertise, agile decision-making, and—of course—their focus on relationships.

    Visit our website to see how you can improve your value with cost-effective lending technology, compete with larger institutions, and be a standout in your community.

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    Tyreo Harrison

    As Executive Vice President, Lending & Insurance Solutions, Ty Harrison leads teams of lending and insurance professionals that are dedicated to delivering value-added programs, services and technology tailored to address the needs of lenders, loan servicers, portfolio managers, mortgage brokers, insurance agents and insurance brokers.

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