What Drives Local Home Equity Rates

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Should I use a small local bank or a national bank for my loan?

What Drives Local Home Equity Rates

Your local banks are made up of two different types of institutions:

  1. Small, independent banks
  2. National banks
Each of these institutions has a different way of factoring local home equity rates. Small, independent banks have more freedom in setting rates. Since they aren't generally publicly traded, they don't have large groups of shareholders to satisfy with profits, which means they can be more liberal in the local home equity rates that they offer. This also helps them become more competitive with national banks.

National banks must think about their shareholders when setting rates, so they often rely solely on the economic and interest rate environment when determining their local and national home equity rates. You'll probably find that, no matter what state you live in, the rates are the same for the national banks.

Another advantage of choosing local banks rather than national banks for your local home equity rates is that the interest you pay for your loan with a local bank often helps out your local community. It pays the salary of all the employees of the local bank, and chances are they spend it locally. Your local bank may also give to local charities and local causes.

   

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