Why Should I Get a Mortgage through a Credit Union?

Credit unions operate much like banks, but they are non-profit organizations with specific membership requirements. The members of the credit union are the collective owners of the union, offering some distinct advantages over normal banks for mortgage origination. Credit unions often offer lower rates, easier approval, and greater loan customization. Here are four main advantages of working with a credit union vs. a bank for your mortgage.

Easier Approval
In general, credit unions are more likely to lend to people with less optimal credit scores, and offer options for smaller down payments. With a traditional mortgage, you often have to put 20% down to avoid private mortgage insurance(PMI).

Lower Rates
Because credit unions are exempt from paying federal taxes and public stock market pressures, they can offer higher interest rates for deposits and lower interest rates for loans. The big banks like Wells Fargo and Bank of America, are often caught doing shady loans and other moves to greatly inflate top-line revenue. These risky dealings generally are less frequent in credit unions.

Fewer Fees
There are many unavoidable costs of taking out a mortgage: closing costs, vendor fees, and insurance. Many banks and mortgage brokers will also charge origination fees and other processing costs. Many credit unions minimize these where possible. They still need to be profitable, but the overall aims are slightly different.

More Customization
Credit unions often prioritize customer service for their members. Banks are primarily motivated by stock prices and quarterly profits. You may get a better, more personalized experience by working with a credit union to originate your mortgage.

When you’re ready to take out a mortgage, you have a lot of options. Like with other financial decisions, you should shop around across credit unions, banks, and other lenders to find the best deal for you.

If you’re not getting the rate you think you deserve, improving your credit score is one of the best ways to increase your chances of getting a competitive mortgage rate. If this is the case in your situation, please give us a call at 214-810-2733 today.