The Difference Between Local and National Banks

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What is the difference between local banks and national banks when it comes to home equity loans?

The Difference Between Local and National Banks

The debate between local lenders and national banks is a difficult one. While you compare home equity lines of credit and try to weigh the benefits of a local bank against those of a national bank, be sure to consider the following:

  • Local banks understand local needs: A mortgage officer at a local bank has a lot more leeway to approve a loan that they know will improve the property values in an important part of town. Additionally, local lenders understand the heating, cooling, and other needs of residents. Because of this, they may be quicker to approve your loans and have fewer questions than a larger national bank.
  • Rates: Local banks could be at a disadvantage to large banks in terms of rates because they have fewer loans, which means fewer profits. This could result in larger fees. However, many local banks try to keep their rates lower than large national banks in an effort to be competitive. In addition, they may have lower closing costs and bundled account plans that save you additional money.
  • Banking history: It's easier for many homeowners to have their mortgage at the same institution as their checking, savings, and CDs. When using local banks to find your loan, any preexisting relationship that establishes your income, assets, and credit history could work in your favor.

   

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