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Get a 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 out of their services, you need to know how these organizations differ and how you can benefit.

[b:3180badf78]Loan Programs:[/b:3180badf78]
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.

[b:3180badf78]Loan closing:[/b:3180badf78]
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.

[b:3180badf78]Loan servicing:[/b:3180badf78]
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.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

The information on "Mortgage from bank or credit union" as given above is very useful but can you tell me what are the products that are offered by the credit unions?

Thanks in advance,
Scot

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jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Thanks,
Jerry

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

may i take loan against my insurace policy max newyork life insurance

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sara's picture
sara | Joined: July 5, 2006 03:16 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Thanks,

Sara.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Can anybody join a Credit Union?

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jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

Under present Federal Statute, Credit Unions can't serve general public. You need to qualify for a credit union membership.

Memberships can be earned through your employer, any organizational affiliations like churches or social groups.

You can join being a resident of a county where a community chartered credit union is allowed to serve.

James

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi,

My father is a retired Central govt employee can we get the Motgage loan rennovation of the house.

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Brian Dela Cruz's picture
Brian Dela Cruz | Joined: April 17, 2006 12:10 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Thanks,

Brian Dela Cruz

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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

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livinginnky's picture
livinginnky | Joined: September 8, 2007 08:31 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

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Jeanette's picture
Jeanette | Joined: October 19, 2007 08:57 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Jessica,

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.

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Jessica's picture
Jessica | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jeanette,

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 [url=http://www.mortgagefit.com/refinance.html]refinance[/url].

Regards,

Jessica

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

is it better to get a mortgage from a credit union of from a mortgage company

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

it depends, L. what you'll find is that credit unions have a very limited scope - basically 15 or 30-year fixed rate conventional loans and maybe some adjustable rate products. what they will probably lack is fha lending capability, which is major in this marketplace. mortgage companies can offer a wider variety of choices, along the lines of "the mortgage that's just right for you."

on the other hand, a credit union may have slightly easier guidelines to meet. they may not be secondary market-oriented, meaning they will keep your loan and continue to service it as well. ask them first.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Most Credit Unions allow new membership by living or working in a county they service. When it comes to Mortgage or any other type of loan they are always your best bet. Credit Unions are Not for profit so any money they earn is paid back to the member not used to come up with new fees or pay high salary. Your loan will stay with the Credit Union and unlike a Big Mega Bank the president also resides in your area. If you have a issue with their open door policy within reason you can talk to him your self. So the next time you find that your credit card due date has changed without your even knowing; your interest rate has been raised due to a general rule for a lot of customer and despite you good credit ratting you are unable to keep your nice low rate. You may want to give them a try!

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

i am an avid supporter of credit unions. i worked at one during the 90s and it was a joy to be able to truly help people in need because our policies were a lot less strict than the big banks. that being said, i also recognize that the parameters have changed over the years.

most credit unions are now players in the secondary mortgage market, so there are far fewer who offer portfolio loans, which will generally be done on a more liberal basis. they do still exist, of course, but they're fewer and farther between than formerly. as for big salaries, yes they do, indeed, exist in creditunionland, so don't necessarily believe what you've read above, in every case. and yes, the president is going to be reasonably local to the area as well. open door? maybe...depends on the personality of the ceo, of course. but that's just about the case no matter where you go. some of the big banks have presidents who are open-minded, too (just not too many).

but i definitely recommend credit unions for their sensible savings/checking/personal loan/credit card policies. as for mortgages, it really depends on the specific credit union you are a member of.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

We are currently in a land contract for 1 year. Had trouble in the past filed bankruptcy with a foreclosure in may 2008. Would we be eligable for a mortgage loan in a year? Our credit score meets the criteria?

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smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Jules!

Welcome to forums!

After a foreclosure, you'll have to wait 3-4 years in order to get a mortgage. As your property was foreclosed in 2008, there are chances that you will be able to [url=http://www.mortgagefit.com/Mortgage-Basics/do-i-qualify-for-a-mortgage.h... for a mortgage[/url] at the end of 2011.

Feel free to ask if you've further queries.

Sussane

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gmakerley's picture
gmakerley | Joined: November 9, 2007 07:36 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Jules, you'll have to keep up on the rules here. Bankruptcy and foreclosure are two of the worst things that you can have appearing on your credit report. Lenders - assuming they are in the secondary market - are reluctant to consider your case based on that. Not only that, but Fannie Mae and Freddie Mac have revisited their stipulations regarding those two bad boys of credit, and they'll not likely be considering anybody who's had a recent f/c or bk for quite some time in the future. Watch out, because FHA will follow suit as well - those two bugaboos will haunt folk for quite some time, I'm certain.

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adrianjill31's picture
adrianjill31 | Joined: August 16, 2012 12:07 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Well, i think only credit union is one of the best option for getting a mortgage loan....as compare to banks..

Thanks,

[size=9:b4cdbcb1f2][color=Red:b4cdbcb1f2][External link deactivated as per forum rules. Thanks.][/color:b4cdbcb1f2][/size:b4cdbcb1f2]

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