Posted on: 28th Dec, 2005 02:51 am
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.
Loan Programs:
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.
Loan closing:
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.
Rates and closing costs:
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.
Loan servicing:
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.
Loan Programs:
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.
Loan closing:
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.
Rates and closing costs:
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.
Loan servicing:
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.
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.
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.
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?
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.
Well, i think only credit union is one of the best option for getting a mortgage loan....as compare to banks..
Thanks,
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Thanks,
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