Mortgage loan programs available with the bank, lender, or the credit union may differ in various aspects. In order to get the best out of their services, you need to know how these organizations differ and how you can benefit.
Unlike banks which are profitable organizations serving customers, credit unions are sometimes non-profit financial institutions owned by its members. Their services are customer oriented and not aimed at raising profits. They offer loan programs only to its members. Therefore, with a credit union your search for a suitable mortgage is limited.
With a bank, your options are more varied. Because bank loans are designed to profit the institution more than the borrower, they are able to offer a greater variety of choices.
When you take out a mortgage from the bank, the closing process may be shorter than with a credit union. Credit unions take a longer time to close on a loan because most of the unions do not use computerized underwriting systems to review the loan documents.
[b:3180badf78]Rates and closing costs:[/b:3180badf78]
When you seek a mortgage from a credit union, you will have to pay lower closing costs and a reduced interest rate on the loan. Although you may have to pay a larger interest rate with a bank loan, you'll get more for your money.
With a credit union mortgage, the union officials will service the loan throughout the life of the loan. However, banks frequently sell mortgages to other lenders for a variety of reasons. This means that your loan may be handled by at least one other organization during the life of the loan, which could create a lot of inconvenience and difficulties for you that you may not have with a credit union.
Looking for a mortgage transaction with a credit union can be a wise decision if you can obtain a low interest rate. On the other hand, banks may offer a higher interest rate, but they will provide a variety of loan packages that may offset the cost. Whichever option you select, consider all the aspects of both mortgage providers and try to determine which will benefit you the most.