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Top 10 Advantages of a Credit Union Mortgage


If you’re thinking about applying for a mortgage, you may have many questions about the process. Should I apply for a mortgage through a real estate portal? Is an online mortgage provider a reliable option?  Do credit unions do mortgage loans, or will I have to go to a bank? The answer is that credit union mortgage loans are available and may even offer additional benefits over banks and online lenders. Here are ten reasons a credit union mortgage is the right choice for so many credit union members.

#1 Relationship-Based Services

The thing that sets credit union mortgage loans and other financial services apart is the relationship you develop with your lender. Often, credit unions are local, community-based, or cater to a specific clientele (like veterans) so you actually get to know the people you’re working with on your home loan.

#2 Lower Interest Rates

You may find it surprising that credit union mortgage rates may be lower than those offered by banks or online mortgage lenders. In fact, depending on the loan’s terms and the borrower’s credit score, you may see a difference of a quarter of a percent or more at any given time.

How can credit unions afford to offer mortgage interest rates that are lower than those of other lenders? Because as a non-profit financial institution, credit unions don’t have to pay dividends to shareholders, and they enjoy significant tax benefits. They may pass those savings along to their members in the form of lower interest rates on purchases from cars to homes.

#3 Lower Fees

Similarly, credit unions often charge lower closing costs and fees than other mortgage providers. This means that as a homebuyer, you’ll save upfront at the closing table in the form of fees, then keep saving month after month through lower interest rates.

#4 Wider Variety of Loan Options

Credit unions are focused on what works for their members, emphasizing saving them money. By offering additional options, members can more closely tailor a home loan to their specific needs and requirements.

#5 More Help for First-time Homebuyers

Typically, banks and online lenders take a pretty black-and-white view of mortgage eligibility. They’re looking for specific numbers, and if your finances don’t add up according to this month’s algorithm, you’re out of luck. For first-time homebuyers, especially those in pricier metro areas, this can make it exceptionally difficult to qualify for a mortgage.

With a credit union mortgage, however, first-time homebuyers are members just like everyone else. That means they have access to the personal service that credit unions provide to overcome the challenges of their first home purchase. Your credit union lender supports you — the member not the company’s stockholders. Plus, credit unions are known for the valuable financial education they offer their members.

#6 More Help for Those with Credit Challenges

Similarly, bouncing back from financial challenges can be made even harder when no one will provide opportunities for you to rebuild your credit. The reality is, anyone can experience a job loss or life event that creates a financial hardship, yet some banks are unwilling to offer a chance to prove your creditworthiness.

By contrast, credit unions exist to help all of their members make financial decisions that are right for them. They may offer ways those with lower credit scores can improve their score with secured credit cards or financial education. In addition, because they may charge lower fees, it may be easier to put together the cash needed for your purchase.

#7 Greater Sense of Community

Many credit union members are tied together by a shared employer, interest, or military background. Other credit unions exist to serve the members of a specific state or local community. No matter what the basis of the credit union, members may enjoy a greater feeling of connection than banks, or online lenders can provide.

Perhaps it’s because credit unions are member-owned they tend to be friendly places. Financial services are provided with the members’ best interests at heart, so employees join in the sense of community, too.

#8 Personalized Customer Service

Have you ever been nervous to talk to a loan officer at your bank? Many credit union members feel more at ease at their local credit union where they bank, have credit cards, and vehicle loans. In fact, they might know many of the staff on a first-name basis.

At a credit union, your membership means that the employees you work with are focused on what’s best for you, from the products they provide to the service they offer. When your credit union home loan is approved, the credit union isn’t granting you a gift. It’s supporting you as one of its members.  And many credit unions cater to a specific group like veterans. So being part of a group that shares your values can enhance your customer experience.

#9 Access to Other Financial Services

Imagine getting a home loan from one company, a car loan from another, and doing your banking with yet another financial institution. When all of your finances are scattered, it can be difficult to keep track of your accounts and complicated to make payments on time.

Credit unions are different from mortgage brokers and mortgage banks. Most credit unions are full-service financial institutions, so you can keep your whole financial life in one place. In addition, with robust online services, it’s easy to track your payment progress across each of your loans and to transfer money from one account to another.

#10 Goal Driven Financial Services

Because your credit union is focused on you their member rather than shareholders, they can offer services that are personalized for your specific needs. For example, a community-based credit union can provide information on local tax incentives and down payment options. An employee-based credit union may know more about financial instruments available through your labor union or professional organization.

With a credit union, you’re not a number. Your lender’s professional expertise is dependent on understanding the unique needs of the credit union’s membership. That is a powerful incentive and one that ensures that when you apply for a credit union mortgage, you’ll be able to get your questions answered so that you can borrow with confidence.

We hope that this article has helped you to understand all of the reasons that a credit union mortgage might be the right choice for your financial future.

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After your application, we’ll help you:

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1Rates are updated daily at 10:15am EST. The advertised rates and points are subject to change. The information provided is based on discount point, which equals percent of the loan amount, and assumes the purpose of the loan is to purchase a property with a 30-year, conforming, fixed-rate loan. Loan amount of $400,000; loan-to-value ratio of 75%; credit score of 760; and DTI of 18% or less. The property is an existing single-family home and will be used as a primary residence. The advertised rates are based on certain assumptions and loan scenarios, and the rate you may receive will depend on your individual circumstances, including your credit history, loan amount, down payment, and our internal credit criteria. Other rates, points, and terms may be available. All loans are subject to credit and property approval.