Biggest Bank
The largest and biggest banks in the US tend to have operational costs for a myriad of things, such as the brick and mortar of the bank location site, taxes on the commercial property, insurance and various other costs. But are they always the best choice?
They all offer a range of services to their customers including checking and savings accounts, credit cards, loans of various types, investments, retirement plans, business banking services. The biggest banks in the US also know that they have brand recognition, and do not have to offer the best rate or less costly loans as bank customers will naturally think of them when it comes to wanting a loan. Big banks know that they will not win over everyone, but the ones that do, knowing they can make margin spreads and origination costs that not every borrower can see due to them being direct lenders, as there would be no reason to provide out to other lending facilities money when they have customer savings and checking accounts dollars to lend out. When you are a direct lender, the margin rate and true closing costs may be a bit more hidden. Lenders have the ability to charge a higher base rate, and claim it as their base rates.
Biggest Banks vs Mortgage Broker
When looking for a loan or a mortgage, many people assume that the biggest bank, a brick and mortar branch is the best option. Naturally, the larger banks have the most capital, but they generally have much higher expenses to pay for those offices and offer a narrow range of financial instruments, as the banks tend not to take too much risk when it comes to mortgage loans.
Unlike big banks are mortgage brokers, as mortgage firms have the ability to shop your loan around to various lenders. Bank lenders are not required to have licensed individuals when dealing with your mortgage transaction, as they can lend their money out to whomever. However, a mortgage broker must be licensed in each state they do business which means passing a state exam. This should provide the borrower the confidence that the mortgage broker should have adequate knowledge on mortgages.
Biggest Banks And Profit
One concept most people tend to think is that the biggest banks are considered "too big to fail". That means if any one of them starts failing it could have dire consequences on the economy so the government will stop at nothing to prevent their collapse. Since November 2008 federal regulators have provided billions in funds to support these institutions, which in some cases were used for acquisitions, dividends, bonuses.
The biggest banks can get away with paying their customers lower rates on what used to be free without restrictions on checking and savings accounts, because some people are comforted by the fact that their deposits are protected up to FDIC limits.
However, even though these banks may be the largest and perhaps the most stable, they tend to have high operation costs due to the Dodd Frank Act. Assessing all of your options and considering a range of lenders is the best way to find favorable interest rates. At MortgageQuote.com, we offer a personalized service to our customers and connect them with a variety of lenders, not just the biggest bank.