2) Lower interest rates. Community banks offer attractive loan rates, especially on so-called “jumbo†mortgages, according to McBride. Such loans usually are larger than $417,000, and the national average for a 30-year, fixed-rate jumbo loan is now around 6.7%.
A recent look at Bankrate.com found lenders willing to make jumbo loans at rates around 5.4% to creditworthy borrowers. Community banks often hold onto the mortgage loans they make so they’ve avoided the problems of the mortgage-backed securities market, which enables them to quote lower rates on jumbo loans. “Considering the size of the loans and the difference in yields,†says McBride, “consumers may enjoy notable savings by going to community banks for jumbo mortgages.â€