Pentagon Federal Credit Union
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Affinity Title

MORTGAGE KNOWLEDGE CENTER

PenFed Mortgage with Confidence

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
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image

VA LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

  1. Home
  2. Mortgage Knowledge Center
  3. Top 10 Reasons to Consider a VA Loan from a Credit Union

PenFed Top 10, VA Loans, Purchase, Closing on a Loan

Top 10 Reasons to Consider a VA Loan from a Credit Union

What You'll Learn: Credit Unions Catering to Vets Offer Lower Interest and Fewer Fees

EXPECTED READ TIME: 7 MINUTES

January 28, 2022

Do credit unions do VA loans? Yes, some offer VA loans, but not all. And hands down, some of the best mortgage lenders for veterans are credit unions that specialize in VA loans. Just like veterans and service members, credit unions are focused on serving others.

And many credit unions catering to vets offer lower interest and fewer fees than mortgage brokers and banks. Let’s explore why a veteran or service member might choose to  purchase a VA loan or IRRRL from a credit union.

#1 Non-Profit VA Loan Lenders

Credit unions are “non-profit”, with members being part owners. If the credit union makes a profit, it can be reinvested to support its members. Profits help keep rates and fees low.

The purpose of banks and mortgage brokers is to make money, that’s why they’re “for-profit”. Their profits go back to the shareholders. Therefore, the banks’ fees and interest rates may be higher than credit unions.

#2 Service-Oriented

With so much automation, sometimes customers feel more like a bother than a  valuable asset. Many credit unions tend to be more customer-oriented with the small-town touch, even if they have millions of members.

Along with the personal service, credit unions also offer technology that makes banking easier and more convenient. Many of the larger credit unions are open 24/7. That’s especially helpful if they’re serving veterans all over the world.

#3 A Strong Purpose to Support Veterans

Credit unions typically are formed to support a specific group. Some credit unions were founded to help service members and veterans. Along with supporting veterans, members may find many other things and causes in common, such as patriotic American values and a strong work ethic. 

#4 Lower Rates for Credit Union VA Loans

When it comes to getting a home loan, credit unions may offer some of the lowest VA interest rates. Rather than sending any profits to shareholders, or increased pay for top executives, a credit union may reinvest their earnings into their members in the form of lower interest rates and fees.

Even a .25% lower interest can save you thousands over the life of the loan. So, when you’re shopping, it’s always wise to compare credit union VA mortgage rates to banks.

And if you’re looking for the best IRRRL rates — start at credit unions that support veterans. VA IRRRL lenders offering the lowest rates often have the most experience too.

#5 Lower Lender Fees

When you’re looking at VA mortgage interest rates, make sure to check out the lender closing costs such as origination, underwriting, and credit report fees. Keep in mind that many closing costs charged in a loan are from third parties and are not controlled by the lender. These include title and escrow fees, homeowners insurance, and property taxes. So, make comparing lenders easy and only compare their fees and the interest rates.

Buydown fees are another good thing to compare. If you want a lower rate, how much does it cost you? There can be a difference between lenders.

#6 Member Discounts

Credit unions also offer member discounts for other services a veteran might need. So, in addition to receiving low mortgage rates and fees, members can also save on other services like homeowner’s insurance, car buying services, auto insurance, car rental discounts, and more.

Being part of a credit union can give you lower interest rates on VA purchase loans and refinances plus advantages mortgage bankers and brokers can’t offer.

#7 Financial Education

Besides offering VA home loans and other mortgage and financial services, many credit unions provide financial education for their members. That’s because since credit unions are non-profit and the members are part owners when a member is financially successful — so is the credit union.

Credit unions tend to educate their members on how to build good credit, the best ways to save money, the smartest ways to finance college, how to save for retirement, and more.

#8 Multi-Product Convenience

Credit unions offer a vast array of products, including VA home loans, conventional loans, FHA loans, and jumbo loans. Plus, members can get their other financial services at the same place for ease and convenience.

Members appreciate that they can log in online and see their checking, savings, credit cards, auto loans, and mortgages all in one place. That makes bill paying and transferring money a breeze.

#9 Supports Local Charities

Veterans more than almost any other group need and deserve assistance. If you’re looking to join a credit union — see what charities, they support.

In addition to making smart personal financial choices, it’s rewarding to align yourself with a group that helps veterans.

#10 Experienced in Closing VA Loans

Whether you’re getting a VA loan to purchase a home or an IRRRL to refinance, having a lender experienced with VA loans is vital. Credit unions that primarily offer VA loans may process thousands of mortgages every year. As a borrower, this should give you more confidence that the loan process will be smooth and stress-free.

Experienced IRRRL lenders know what documentation is needed and how to deal with complicated issues like restoring a VA loan. Credit unions can offer the help, support, and mortgage financing veterans need and appreciate.

For more information about PenFed Mortgages:
 

PenFed Mortgage: 

800-970-7766

Get Started

SIMILAR ARTICLES

VA Fixed-Rate vs. VA Adjustable-Rate Mortgage

What is better a VA fixed-rate or VA adjustable-rate mortgage? PenFed compares VA ARMs to fixed rates. See how they differ and what might be best for you.
woman moving into home with mortgage

Understanding Benefits of VA Loans

If you're wondering, are VA loans worth it? Read on to discover what the benefits are of a VA loan. We'll let you know why VA loans can't be beaten.
house with american flag

Everything You Need to Know About VA Loan Rates

Questions about VA loan rates? Let the experts at PenFed help. In this blog, you'll learn who sets VA rates and how VA loan rates compare.
calculator and mortgage rates

VA Loan Eligibility: Step by Step

Wondering how to get a VA loan? PenFed Credit Union provides the step-by-step ways to get a VA loan, from eligibility to moving into your new home.
man researching va loans on laptop
image

VA LOANS

Rates starting at % (APR %)¹

 

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

Home Buying Steps

  • Getting Started
  • Finding a Home
  • Getting a Mortgage
  • Home Ownership

Mortgage Topics

  • VA Loans
  • Conventional Loans
  • First Time Homebuyer
  • Home Equity
  • Homebuying 101
  • Checklists
  • Adjustable Rate Mortgages
  • PenFed Top 10
  • Refinance
  • Jumbo Loans
  • FHA
  • Videos

Mortgage Products

  • Mortgage Center
  • Refinancing
  • Home Equity

PenFed HELOC

Rates as Low as % APR* with flexible use of funds

Apply before becoming a member.

After your application, we’ll help you:

1. Discover you’re eligible to become a PenFed member

2. Open a Savings/Share Account and deposit at least $5

VA Disclosures

1Except for holidays, rates are updated Monday through Friday 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 $450,000; loan-to-value ratio of 95%; 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.

*Prime Rate is % as of . The APR for this Home Equity Line of Credit (HELOC) is based on prime plus a margin and can change monthly. Fixed Rate Advances will be amortized over the Fixed Rate Advance Term, with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin, and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes.

  • Annual Fee: Notwithstanding the foregoing, an annual fee of $99 will be assessed on each account anniversary.
  • Home equity lines of credit (HELOC) are variable rate loans and the interest rate is subject to increase after consummation of the loan on monthly basis. Closing costs range between $500 and $8,500 for credit lines of $500,000. Contact a representative for additional details.

Appraisals: PenFed will attempt to establish value via an independent method. If that method is unsuccessful, or the value is not sufficient for the amount requested, an appraisal will be required regardless of CLTV. An appraisal is always required in the following circumstances:

For all loans with a loan amount greater than $400,000.

If an appraisal is required, it must be ordered by PenFed. You will be contacted for authorization and payment prior to ordering. Appraisal fees average $550 to $850 (some run higher).

  • Closing Cost Credit: PenFed will pay most closing costs associated with a home equity line of credit (HELOC), which includes credit report, flood certification, settlement/closing, property ownership and encumbrances search, recording, property search, and quick close. Member is responsible for any city, county, and/or state taxes if the subject property is located in FL, LA, MD, MN, NY, TN, or VA. If an appraisal is required, the member, who is responsible for the fee whether or not the loan closes, will pay the cost.

Interest may be tax deductible, consult a tax advisor for further information regarding the tax deductibility of interest and charges.

Fixed Rate Advance Lock-In You may lock in an Annual Percentage Rate for Advances during the Advance Period. During your Advance Period, you may choose to have three separate Fixed Rate Advances locked in at any one time, with a maximum of two new Fixed Rate Advances per calendar year. Each Fixed Rate Advance must equal or exceed Ten Thousand Dollars ($10,000.00) and you may not request a Fixed Rate Advance that would cause the amount you owe to exceed your Credit Limit. The only term option for your Fixed Rate Advance is 240 months (“Fixed Rate Advance Term”). However, the term of your Fixed Rate Advance cannot exceed your Repayment Period.

Fixed Rate Advances will be amortized over the Fixed Rate Advance Term with the payment consisting of principal and interest. Your Annual Percentage Rate for a Fixed Rate Advance will be calculated by adding your Prime Rate, your Margin and the Additional Fixed Rate Lock-In Margin. Your Annual Percentage Rate for a Fixed Rate Advance shall not exceed 18% and shall be equal to or greater than % for primary residences and second homes and 4.75% for investment properties.

Property Insurance: Property insurance is required.

Multiple PenFed Loans: Multiple PenFed Equity loans and HELOCs are available as long as the member and collateral qualify (except Texas). For Equity loans and HELOCs the total indebtedness cannot exceed $500,000 for all PenFed Equity and HELOCs combined.

PenFed does not lend on:

  • Mobile homes
  • Co-ops or time-shares
  • Properties that are currently listed on the market for sale
  • Commercial property or property used for commercial purposes, even if a residence is part of the property
  • Undeveloped property (land only)
  • Properties with more than 4 units

Properties that are currently under major construction/renovations: Property must be fully livable, with no safety issues. (Examples: no missing rails from stairs/decks, no open walls with wires showing, missing kitchen appliances/counters, missing bath fixtures or unfinished pool).

  • Additional limitations may apply

Home Equity Line of Credit:

  • This Account has a Draw Period of 10 years, followed by a repayment period of 20 years.
  • If only minimum payments are made during the draw period, the loan balance will not decrease.
  • In Texas, the maximum CLTV available is 80% on owner occupied properties. Additional restrictions apply in Texas, so please ask a representative for details.
  • In all other states, the maximum CLTV is 85% on owner occupied properties and second homes. Additional restrictions or requirements may apply based on application characteristics.
  • Property type of Condo has a maximum CLTV of 80%.
  • The maximum CLTV available is dependent on credit qualification.
  • Rates vary depending on owner occupancy and CLTV and other loan criteria.

Minimum Loan Amount Requirements in all States:

  • For an owner occupied property or second home the minimum loan amount is $25,000 and the maximum amount is $500,000 with a CLTV of 85% or less of the fair market value.

Other terms and conditions apply; call 844-918-4307 to speak with a representative for details. All rates and offers are subject to change without notice. To receive advertised product, you must become a member of PenFed.

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This credit union is federally insured by the National Credit Union Administration. Rates are current as of October 2023 unless otherwise noted and are subject to change.

APY = Annual Percentage Yield
APR = Annual Percentage Rate


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Routing #256078446

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IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website that is not a part of Pentagon Federal Credit Union.


The content you are about to view is produced by a third party unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Realty, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Realty, LLC, see the Affiliate Business Arrangement Disclosure.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party Website.


The content you are about to view is produced by a third party website that is unaffiliated to Pentagon Federal Credit Union. PenFed takes no responsibility for the content of the page.


IMPORTANT NOTICE

You are leaving PenFed.org and entering a third party site. PenFed Title, LLC is wholly owned by PenFed and this referral may provide PenFed a financial or other benefit.


For more information about the relationship between PenFed and PenFed Title, LLC, see the Affiliate Business Arrangement Disclosure.


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