Posted: Wed Dec 28, 2005 3:51 am Post subject: Mortgage from a bank or credit union?
Mortgage loan programs available with the bank, lender or the credit union may differ in various aspects. In order to get the best of their services, you need to know how these organizations differ and how you can benefit from each of their services.
Loan Programs:
Unlike banks which are profitable organizations serving customers, credit unions are non-profit financial institutions owned by its members. Their services are customer oriented and not aimed to raise profits. They offer loan programs that are acceptable by its members only. Hence, with a credit union your search for a suitable mortgage becomes limited.
On the contrary, banks come up with a large number of loan offers, as they are able to create a larger volume of loan originations compared to the credit unions.
Loan closing:
When you take a mortgage from the bank, you can speed up the closing process unlike 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 for reviewing the loan documents.
Rates and closing costs:
When you seek mortgage from a credit union, you will have to pay lower closing costs and interest at a reduced rate. But the banks are likely to offer you variety of options to choose from, although you may get slightly higher rates and also pay higher closing costs.
Loan servicing:
In a credit union mortgage, the union officials themselves will service the loan. But banks sell off mortgages in the secondary market and hence different organizations will be servicing your home loan. This creates a lot of inconvenience, as there can be confusion, possibility of loss in checks, and other problems which may not bother you when you avail the services of a credit union.
Looking for a mortgage transaction with a credit union can be a wise decision if you can obtain a lower rate. On the other hand, banks may offer a higher rate but they provide various loan packages. This helps you to choose a loan program depending upon your requirements. Finally, whichever option you select, consider all aspects of both mortgage providers - the bank and credit union and try to determine which will benefit you the most.
Posted: Wed Dec 28, 2005 10:19 pm Post subject: RE:
Hi,
Generally credit unions offer the same products and services that are offered by the big banks. But some credit unions may not offer each and every product that are offered by the banks because they do not have that same amount on volume that the larger banks have. Banks can afford to deal with loss leaders or products that can lure customers to approach them for loans. But credit unions are interested to offer items that a majority of its members will use.
Posted: Thu Jul 13, 2006 5:08 am Post subject: RE:
Hi,
You can take a loan against your Permanent life insurance which accumulates tax-deferred cash amount. You may borrow up to the total cash amount by taking one or more loans. But a loan against your life insurance policy reduces the death benefits as you are required to pay the interest accrued on the life insurance policy.
Posted: Wed Mar 07, 2007 4:06 am Post subject: RE: loan offer for renovating property
Hi Kranthi,
I think you are from India. Currently we do not provide home loan related services there. But we shall still look out for lenders offering mortgage for renovation in India. And, if we can get some contacts, we shall surely let you know.
Posted: Fri Nov 02, 2007 11:19 am Post subject: combining several loans?
I own several rental properties and have small loans on each as well as my home. I am thinking of consolidating ALL loans, which will leave my home as well as 2 rental properties free and clear of any debts. IS THIS A GOOD IDEA? The lein will be on a rental property for $80,000 freeing up other houses and I can take off the taxes on rental property. In total it is $400 less a month (totaled) than I am currently paying for 15 years at 7.37 % through my bank. AGAIN, IS THIS A GOOD IDEA? tHANK YOU kAREN
The rate of a mortgage on your primary residence will be lower than on an investment property. I can't think of any reason not to have the mortgage on your primary residence. I see this often and the benefits outway the risk as long as you make your payments on time. Often people are worried about taking a loan on their primary residence, but you are taking similar risk placing the loan on investment property. _________________ Eric Matthews
Now Credit Unions have stricter guidelines than lenders or banks. You cannot have any late payments or past due items on your credit report. Your credit score must be 700 or more.
So, when the banks or lenders will give you a loan with a 1*30 or 2*30 and a 90% LTV, the credit union will throw your 1003 in the waste basket.
I think the recent credit crisis in the US have made credit unions more strict as far as the qualifying criteria are concerned. And why only credit unions, even the lenders in general have become stricter due to the troubles they come across on account of delinquency.
I personally feel it's better to qualify at reasonable rate rather than have a late payment on credit report, get 90% LTV and then go on paying high interest payments throughtout the loan term until and unless one gets the chance to refinance.
Jessica
