Local Banks vs National Banks

By Bob Hinz – Owner, HomeWrights Custom Homes

In the classic movie IT’S A WONDERFUL LIFE, Frank Capra’s masterpiece with Donna Reed and Jimmy Stewart as Mary and George Bailey, the old Bailey Savings and Loan was the stand-by institution for residents of the small midwestern town of Bedford Falls.  It was the only place for the “average Joe” to go and get a loan and the help he needed to build his new home.

Part of the inspiration for HomeWrights Custom Homes business model comes from that movie. We don’t lend money for your new custom home like the Bailey Savings and loan, but we do provide the helping hand that folks need to build their own home.

And, when clients ask us where they should borrow money to build, we’ll always direct them to a small (or small-ish) local bank – much like George Bailey’s institution.

New Home Construction Loans in Denver Area

There’s a great reason that local banks should be a first choice for anyone borrowing money to build a custom home – they know the landscape! That’s super important. A local bank understands the value of a new home in Bonnie Brae, or Park Hill, or Morrison, or Louisville.

To an underwriter who’s working on the loan package for a borrower and who’s based in Indiana or California or New York, those neighborhoods are just zip codes, and they have zero influence on the lending equation.

What does a loan officer on the east coast know about Denver custom home building? They likely have lots of data but little local on-the-ground perspective of the neighborhood where you want to build. Knowing where to finance your Denver custom home is just as important as knowing what it costs to build a custom home in the Denver area.

To a local lender, who understands his or her market, and who is paying attention to what’s going on in those areas, and across the front range, those neighborhoods make a difference. Local Denver banks have a vested interest in growing the community where their bank resides.

Local lenders see more than just statistics and zip codes. They know the community, the age of the housing stock, the types of lots and zoning in those areas.  And…they love to be part of the collective improvement of the city where we live.

I’ll always be a small bank fan. And whenever I can, I’ll speak up and let folks know that it’s important – no…imperative – that we do business with small, local banks.  Just better!

If you are thinking about applying for a construction loan, the Project Coordinators at HomeWrights Custom Homes will help you walk in prepared.