For Your Mortgage, A Bank or Credit Union?
When it comes time to mortgage or refinance a house, there are several different types of lenders you can go through. However, two of the most popular options are big banks and credit unions. Both of these institutions have their pros and cons, so you want to weigh your options carefully before deciding on one over the other.
Credit Unions
Credit unions are non-profit organizations. A big emphasis on these institutions is on personal interactions. While many banks have locations all over the country, a credit union may only have one location, and it specifically serves that community. At the very most, a credit union may have a few locations spread out over a city or have partner credit unions. When you do business with a credit union, you can typically expect to receive lower fees but this is only after becoming a member.
Because there is more at stake for a smaller institution, getting a loan through a credit union may take a little longer. They often don’t have an unlimited staff and will do the due diligence on your loan with just a few people. On the plus side, you may be able to get lower interest rates with your mortgage if you opt for this institution. Before getting started, you will want to check with local credit unions near you to see if they offer mortgages. Some unions offer specialized services, so not all of them will be able to help you with everything.
Banks
Banks are operated for-profit. Less of an emphasis is placed on personal interactions, but because of their size they can offer a variety of services. Banks are often much faster at implementing the latest technologies, but generally have higher fees if you decide to open up an account, but most of the time, you can find something with reasonable interest rates.
You can be confident that any nationally-recognized bank in your area will be able to help you secure a mortgage. Not only that, but big banks can offer different types of mortgages depending on what you need. Additionally, the underwriting process usually gets completed much more quickly. One thing to keep in mind is that mortgages with big banks do tend to come with higher interest rates. It is also not unheard of for banks to sell off mortgages to other parties.
Which One Is Better?
When it comes down to which institution is better for getting a mortgage, the answer depends on what specifically you are looking for. Credit unions are usually much more invested in their communities, so you can typically get better customer service. However, if you need to close a mortgage deal quickly, then it may be in your best interest to opt for a bank. A good rule of thumb is to shop around and meet with representatives from both banks and credit unions in your area. You never know what options are available to you until you go out and discover them.
Apart from mortgages, credit unions and banks offer many of the same services. You can open savings accounts and acquire loans from both. See what organizations are around you so that you can begin planning for your fiscal future.
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