Five Advantages of a Credit Union Mortgage

If you are in the market for a mortgage, there are probably a lot of questions running through your mind. Should I apply for a mortgage through a real estate portal? Is an online mortgage provider a reliable option? Do credit unions provide mortgage loans, or will I have to go to a bank? The great news is that credit union mortgage loans are available and may even offer additional benefits over traditional banks and online lenders. Becoming a member is typically quite easy and the advantages you can gain will save you considerably on your mortgage if your application is accepted. Some credit unions even approve mortgages for non-members!

Here are five benefits of using a credit union for your mortgage and why you should consider becoming a member.

1) Quality, personable 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 or community-based or cater to a specific clientele (like veterans), so you actually get to know the people you are working with on your home loan.

At a credit union, your membership means that the employees you work with are focused on what is best for you, from the products they provide to the services they offer. While a credit union may have fewer branches than some of the bigger national banks, most credit unions allow you to join online. You just need to provide some information and then supply a few pictures (your ID and proof of address) to confirm who you are and where you live. This is a simple process that takes just a few minutes to complete. Some credit unions can open the account instantly while others require a business day or two to verify your information.

2) Great rates and lower fees

Not all mortgages are equal. When you shop around, you will find that credit unions usually have lower rates. Profit is the difference: with banks, they need to make profits to satisfy their shareholders. As a member-owned, not-for-profit organization, your credit union is focused on you, their member, rather than shareholders. So, they can offer services that are personalized for your specific needs. Credit unions can offer lower mortgage rates because they borrow against themselves, being responsible to their depositors rather than shareholders who are looking for a return. Taking the profit out of this equation means that a credit union has three options to choose from:

• Lower the rate it charges for its loans.

• Lower the fees it requires for its services.

• Increase the rate of return provided to its depositors.

Securing a mortgage with a credit union will also often result in lower origination fees and processing costs. These reduced fees provide the potential to save several hundred dollars to thousands of dollars, which will normally be part of closing or ongoing costs. As a homebuyer, this means you will save up front at the closing table in the form of fees, then keep saving month after month through lower interest rates.

3) More loan options and other financial services

Credit unions are focused on what works for their members, emphasizing saving them money. No matter what kind of mortgage you are looking for, the majority of credit unions can help you. Most credit unions offer conventional, FHA, VA, and jumbo loans. These can be both fixed-rate and adjustable-rate mortgages. Even if you are not yet a member, you can talk to a credit union about your options. If they are right for you, you can become a new member and take advantage of all the benefits that credit unions provide.

It is also worth mentioning that credit unions are full-service financial institutions, so you can keep all of your finances in one place. In addition, with robust online services, it is easy to track your payment progress across each of your loans and to transfer money from one account to another.

4) Extra assistance for first-time buyers

For first-time homebuyers, especially those in pricier metro areas, most banks and online lenders are looking for specific finance numbers that can make it 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.

5) Help for those struggling with their 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.

With a credit union, you are 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 when you apply for a credit union mortgage, you will be able to get your questions answered so you can borrow with confidence.

If you are considering a credit union for your mortgage and loan needs, you may be eligible to join PenFed. Discover the benefits, discounts, and services available to our members today.