When you are in the market for a mortgage, you probably look at the big name banks – the banks that you see everywhere. All too often, the little banks and credit unions get left out of the mix. You could be doing yourself a disservice by not considering credit unions, though. They offer a large number of benefits for borrowers looking to get a mortgage.
Special Programs are Available
Credit unions often offer their own loan programs, not just the standard Fannie Mae, FHA, and VA loans you see. Instead, you’ll likely see niche programs that appeal to borrowers that might not fit the standard mold of a conventional or FHA mortgage.
If you have less than perfect credit, a low down payment, or a large gap in your employment, you won’t have to write off your chances of securing a mortgage. Credit unions often work with borrowers just like you. They may not advertise the programs that cater to these issues, but the programs are there for the taking. It’s up to you to shop around and find credit unions that will accept your situation and give you a purchase mortgage.
Credit Unions May not Sell Your Loan
If you have heard horror stories from borrowers whose loan has been sold numerous times, you may want to avoid that situation. If you prefer to deal with the entity that provides you with the mortgage, credit unions may be a good option.
Sticking with the same company is convenient. You pay the same lender each month and you know how they work. You get comfortable with calling customer service and aren’t afraid to ask for what you need. If you get a loan from a bank and it continually gets sold, not only may confusion erupt, you may also find that there are issues with your escrow account either being short changed or overly funded. Sticking with credit unions won’t allow these issues to occur.
You Get a More Personal Relationship
At a credit union, you are a face with a name, not just a number. If you called up a major bank and talked to customer service, they would not know you from the next person. In fact, you’d probably get a different customer service agent every time you call.
Credit unions pride themselves on their level of customer service. You can develop a relationship with the banker and even the loan-servicing department. This makes it easier when you have questions, need more services, such as a HELOC, or you just want to know that your loan is in good hands.
The Fees May be Lower
Credit unions typically operate as a not-for-profit. This means they won’t be out to charge you the highest closing costs they can. You may find that the closing costs and even the interest rates are lower. The credit union is there for the people; they aren’t out to make a profit. With lower costs and fees, you may even have an easier time getting approved for a mortgage.
It’s a good idea to include credit unions in your search for the perfect mortgage. You never know which entity is going to give you the best rate, best fees, and the term that you can afford. You may be surprised to find out that it’s your local credit union that comes through for you.
As you shop around, make sure that you look at the APR and not just the interest rate. The APR takes into consideration the costs to close on the loan on an annualized basis. Sometimes even loans with a low interest rate have a higher APR, which means it may cost you more in the end. Make sure you compare apples to apples and you’ll find yourself a loan that works for you.