The geographic trade area in which a bank will lend is usually defined as the trade area from which a high percentage, such as 75 or 80 percent, of their loan and deposit business takes place.
When the bank or lender defines it's trade area the lender will attempt to include all of the applicable levels of income and property eligible for servicing.
If a lender lends outside of their trade area these "out-of-territory" loans carry higher risks than do the loans that hit closer to home. and it would seem that the obvious reason for this is the problem of being able to service the loans properly because of the distance involved with a loan that's outside of the circle.
I guess you can say that the bank wants to keep a close eye on it's money. Understandable !
In some cases, though, these outside loans will be made because of investment fiancing needs.
Check with your lender to see what their guidelines are.
Any thoughts ?
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Aloha David,
I not sure if you know it but you posted this blog twice. No big deal. these thing happen to all of us. It is always a good idea to have a number of lender that you have worked with and that you know will lend in the areas you properties are in. I always like to recommend at least three different lenders to my buyers.
Wrong, Bill. I didn't post it twice. Look at my main blog page for the sequence and you'll see that the entry was posted once. Check your browser window for duplicates. Thanks for your comment about multiple lender recommendations. Hope your having a fine week. Aloha.