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Should you get a mortgage from a credit union?

By on March 23, 2021 0

Consider a credit union when shopping for a mortgage

If you are looking for a mortgage, it is a good idea to contact different types of lenders. This includes banks, mortgage companies, mortgage brokers and credit unions.

A credit union can offer benefits that other lenders do not because it is a non-profit, member-owned organization.

Or maybe not. Not all credit unions are created equal, and many mortgage companies and banks stellar work Low cost. That’s why you have to compare them all.

Shop the rates with today’s top lenders. (May 28, 2021)

How does a credit union work?

Credit unions are non-profit organizations owned by their members. However, that doesn’t mean they don’t make money. The difference is that the money a credit union makes by lending you is returned to all members, including you.

Credit unions Often target specific groups for membership, and you must be part of that group to be eligible. For example, there are credit unions for firefighters, for people who work in the Pentagon, and for teachers.

But there are also credit unions for residents of their communities. The main point is that it is usually not difficult to find a credit union that you can join. You just can’t choose from all of them like you can with banks.

Does “non-profit” mean “cheaper?”

According to Datatrac surveys credit unions and banks, there is little difference in the mortgage rates they charge. The survey shows a difference of 0.015 between the 30-year average fixed mortgage rates offered by banks and credit unions.

Credit unions, like banks and other mortgage companies, need to earn enough income from their loans to cover their operating expenses. And just like their for-profit counterparts, some are more efficient than others and therefore may charge lower rates.

In addition, members and employees of credit unions want to to see some gains. As commentator Mattnatl said in an article for Lifehacker, “I work for a credit union and have been in this industry for over a decade.

While we say we are “not-for-profit” we are totally for profit. Over the past 5 years, we have definitely switched to selling. The slogan is this with the CEO and executives when I go to conferences, “Even though we are not for profit, if you make more, we can pay you more”. “

Check your new rate (May 28, 2021)

Conservative credit unions

According to Time Magazine, credit unions are more conservative when taking out your loan. It can be more difficult to get mortgage approval from a credit union.

When shopping for a mortgage, you’ll want to learn about the credit union underwriting guidelines if you are a less than perfect candidate.

Some credit unions, on the other hand, have developed innovative products for their clients, including 100% first-time buyer financing, financial advice, and closing cost loans.

Your options depend entirely on the policies of the credit union you join, so educate yourself before committing to any organization.

Don’t leave out traditional lenders

Since credit union products, policies, and prices can be ubiquitous, you shouldn’t completely give up on “regular” mortgage lenders when shopping for a home loan.

Competition is healthy and keeps prices low. Get at least four mortgage quotes from a variety of sources – banks, mortgage companies, credit unions, and brokers – and compare them all.

Then call some of the more competitive lenders and see if their guidelines will work for you and if their loan officers are professional and respectful.

This way you make sure you have a good experience and pay a fair price.

What are the current mortgage rates?

Current mortgage rates depend on a variety of factors, including your qualifications, the product you choose and the source of your financing. It’s easy to check with several sources online to get an idea of ​​what you’ll pay.

Check your new rate (May 28, 2021)

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