Why Choosing the Right Bank Takes A Lot of Thinking

One of life’s enduring questions is whether bigger means better.  That is much a matter of personal opinion and specific subjects.  As a kid, a bigger ice cream cone was certainly better, even if you didn’t finish it or it gave you a stomach ache.  Many people these days seem to think that a bigger car is better, at least until gas prices rise above $5 a gallon.  The lesson here is that almost anything can at times be better if bigger and at other times be better if smaller.  Banks are no exception.

When it comes to banking, choosing the institution that is right for you is a highly personal matter.  You need to first decide your priorities an purpose for needing the bank.  Once you carefully analyze the situation, you can decide if a big bank or a small bank is right for you.  Both have their place in the finance industry.

Big banks are often the better choice for large investors.  If you move a lot of money, big banks are better leveraged and more prepared to work with such transactions.  This is especially important if you have investments or financial interests overseas.  Small banks will of course handle these transactions for you, but they will likely secure the help of a big bank to do so.  This will cost them and those costs are usually passed along to you.

Customers that do business in several different cities or states often find the convenience of branch locations to be a plus.  Often it’s easier to deal with a local branch than having to explain things to a small regional bank 1000 miles away.

If most of your banking needs are local and consist mainly of a checking, savings and maybe a money market or other investment account, a small local bank might offer you a better service.  Small banks are much more personalized and are often easier to deal with.  Many people appreciated that old fashion luxury of knowing their banker and being able to speak with him or her directly over the phone.  Many local, small town banks are still this way.

If you’ve ever tried to clear up a banking problem over the phone while speaking to a customer service representative from India, you will quickly come to appreciate the convenience of being able to go to a local bank and speak face to face with a bank representative.  Some things are fine over the phone, but major financial problems may not be one of them.

It’s also usually easier to secure a loan at a good rate through a local bank.  This is especially true if you have been a customer for several years and have established your reputation.  Even if you have some items on your credit record that aren’t stellar, small banks are usually willing to work with you.  With a large bank, even if you have been with them for 20 years, you are still just a number made up of your credit score.

Often small banks also offer better rates on simple investment instruments like CDs and savings accounts.  Large banks often feel they are just losing money with such nuisance accounts and therefore offer lower rates.  Small banks want your business and are willing to pay for it.

Many people feel that big banks are more secure than little ones.  This may be the case since a large institution may be more diversified and have the assets to weather a storm.  But on the flip side, large banks are more notorious for taking risks than their more conservative small town cousins.  As we have recently seen, these risk taking measures can lead to the collapse of even the largest of mega investment banks.

 

 

 

 

 

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About the Author:
This article was edited by Daniel Tobin, a junior editor for Ratelines.com. Since 2004, Ratelines.com has been an independent and objective source for reliable information about the finance industry, cd rates and savings accounts.
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Home Foreclosure: There are Options

If you are facing the tight economy head-on like a bulldog and continue to do well financially, you can consider yourself blessed that you are not facing home foreclosure.

If you are struggling with the shaky real estate market conditions, have become unemployed, or are facing some other financial setback, you may be facing a potentially scary and stressful home foreclosure.

If you do find yourself struggling to make your mortgage payments every month, the first thing you should realize is that you are not alone in your struggle. There are thousands of Americans facing the same or similar circumstances as the housing boom has transformed into the home foreclosure boom.

The second thing you should realize is that there are options available to you. It may seem like the most horrendous thing in the world to be looking at a home foreclosure possibility, and indeed, it is definitely serious. At the same time, a home foreclosure does not have to mean the end of life as you have always known it.

The third thing you should realize is that the bank does not want your house. Banks and other financial institutions are not in the real estate market. They are in the banking and finance industry, and foreclosures are expensive and time-consuming to them. This being the case, many lenders are willing to help you avoid a home foreclosure if at all possible. If you are embarrassed to admit your financial woes, get over it and start helping yourself as soon as possible. Keeping your home is the best thing for you and your bank.

If you have missed only one mortgage payment, you will probably receive a notice from your bank. Do not ignore it. Burying your head in the sand will not work. If you totally ignore your financial institution’s correspondence, they are likely to believe that there is no way they will ever get payment from you and will be less likely to work with you to avoid home foreclosure if you wait too long.

If you are behind on your mortgage payments or expect that you will be due to some personal circumstance, it is time to dig out your loan agreement. Many mortgages haves clauses that actually provide alternatives to foreclosure if certain procedures are followed. Very few people know all the details of their loans, so get out your paperwork and know what is going on with your loan.

There are professional organizations and attorneys to help you, as well. If you think that you can’t afford to hire professional help, it still pays to look into the idea. Professionals who specialize in avoiding home foreclosure know that financial difficulties are what bring clients to them. They probably have a way to help you manage both the foreclosure stop and their fees.

Probably one of the easiest and most common ways to avoid home foreclosure is to modify the terms of your loan. A real estate attorney of home foreclosure expert can likely help you to re-negotiate your mortgage with terms you are able to meet and save both you and the bank all the trouble of a home foreclosure. Most financial institutions are more than willing to come to a mutual, agreeable meeting of the minds in order to stay out of the house-selling market and do what they do best banking.