What is the risk borrowing home loan from a small and new bank?

I am having a traditional loan application with a big bank. I just found a small bank in Florida, founded in 2004, is offering better rate and cost compared to those big famous banks. The small bank is member of FDIC. Somebody told me small bank may not follow federal regulations. How do I tell if a bank is a qualified home loan lender that follows all lending regulations? What is the risk borrowing home loan from a small bank?

FDIC is great and all, but it has almost nothing to do with lending. FDIC means that they have a Federal Deposit Insurance Company protecting your deposits (checking, savings, CDs, IRAs, etc) in the case of the bank going belly up. If the bank ends up getting in trouble, they will sell your loan off to another bank or financial institution for the capital. This can happen in large banks as well as small banks, especially the way the economy is right now. To test this small bank for their federal guidelines, when you walk in next time ask them where they have posted their Community Reinvestment Act public notice. If they look at you like they have to no idea what you are talking about, walk back out the door and don't look back. If they have one, take a seat!!

How can I get approved for a home loan if I am moving to another state?
Hi! My husband and I are trying to move to Indiana in the next year and buy a house. This will be our first home. We both are foster parents in Nevada now. Any home loan advisors out there? Can you tell me how I can get approved/pre-approved for a full 30-40 year home loan when we have not yet gotten new jobs in the state we're planning on moving?


The easiest way to do that would be through private financing. You may have the best luck with something rent to own. Reputable lenders may still allow for that type of purchase if it is done as a secondary or vacation home for underwriting purposes to explain the distance between where you are currently living and working versus where you are buying. The only problem that may cause is the amount of funds you would have to bring to the table. You may need to put 30% down as opposed to say 10 or 20%. If you can get one of your jobs to transfer you to an office where you want to buy, and will provide you with documentation stating their intentions then that should make things much easier for you. Good luck!