Does having a long relationship with a bank give you better deals for loans & mortgages ?

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I have an account since 3 years with Wells Fargo which is one of the strongest banks in North America . I am planning to close this account because i my funds r extremely low and my monthly paycheck goes into other bank accounts that give me good savings rates .

I want to close my Wells Fargo a/c .
1)But people have told me that if i keep my a/c for a long time , i can get better deals on loans and mortgages through Wells Fargo because i have been a loyal customer.

2) On the other hand , people have told me that getting loans and mortgages totally depends on my credit score, credit reports and my impression with the credit bureaus. It has nothing to do with the length of relationship with a bank .

Which is correct from the above ? (1) or (2) ?

  1. Reply
    J West
    May 18, 2011 at 9:03 am

    2 is correct. You can be a customer at a bank for 50 years but the rate of your loans will still depend on your risk which is calculated by your credit score, debt, and income.

    Some perks that you will recieve from a bank for being a long time customer is, they may know you by your first name, they may knock off special fees for you, such as overdraft fees that you accured, or they may give you free checks. .

    Rates will depend on your history, credit, and other calculations.

  2. Reply
    May 18, 2011 at 9:55 am

    Do not get a mortgage from a bank just because you’ve been there a long time. They will only make you think you are getting a better rate.

    Shop around. You’ll be amazed what you can get.

    Don’t go for those scammy mortgages.
    Like the 1 -5 year fixed adjustables with options.
    Interest rates can triple – as it clearly states in the fine print.
    Not to mention they have hefty pre-payment penalties in case you move.
    Get a 15 or 30 year fixed.
    And try to pay 20% to avoid that nasty PMI. It can costs thousands / year that does not go into principal, interest, and its not tax deductible.

    The special treatment – I think – is only for the people that have over 100,000 in savings at that bank.

  3. Reply
    May 18, 2011 at 10:31 am

    2 is more correct. A long term relationship may help very slightly, but 3 years is not a long time for a bank. You should shop around and compare rates when looking for a mortgage.

  4. Reply
    May 18, 2011 at 11:19 am

    Most major banks, Wells Fargo included, will give you a discount on the mortgage rate for being a customer. Although, it usually has more to do with how much money you have with them or what types of accounts you have and less to do with how long you have banked there. Wells Fargo is a great company to get a mortgage loan and they usually have good deals but definitely shop around. One benefit with Wells Fargo is that they very rarely sell their mortgages, which isn’t a huge bonus but you always know who will be servicing the loan and they’re not likely to go anywhere.

    One thing I learned when I got my mortgage though is don’t allow too many places to pull your credit. You will be amazed how much inquiries will decrease your credit score. Ask around about programs/deals and then only let 2 or 3 pull your credit to give you a specialized quote.

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