Pros and Cons of Using a Credit Union for a Mortgage
If you are in the market for a new mortgage or want to refinance your existing mortgage, then a credit union might be the best option.
First – what is the difference between a credit union and a bank?
Credit unions are not-for-profit financial cooperatives that serve the needs of their members (who are also owners) and offer the same types of banking services and products you would find at other financial institutions. These include savings and checking accounts, loans, mortgages, online and mobile banking, online bill pay and more.
So, what are the pros and cons of using a credit union for a mortgage?
Credit Unions are a great option. Sometimes they may feel a little local or small, but they can be sophisticated and often have great service, options and rates.
Here is a quick list of some pros and cons:
|Not-for-Profit Business Model||Product Choice|
|Competitive Rates||Limited Locations|
Pros in detail:
Credit union mortgages are generally very competitive and offer highly personalized services and loan options. If you bank with a credit union, the profits from your loans are given back to members in the form of low rates and personalized service. In addition, credit unions can close on loans quicker since their underwriting functions are generally done in house. They also know their local market really well and are key parts of the local community. Therefore, when you bank with a credit union, you are keeping the money in your community -- a great way to invest in your neighbors, schools, and other local businesses.
Best of all, most credit unions like Nymeo, keep the servicing on your mortgage. Other financial institutions often sell your loan to servicing companies who do not know you, your situation or even your local area, which can often lead to frustration for years to come. You won’t need to worry about that at Nymeo and most other credit unions.
Cons in detail:
While credit unions are generally pretty awesome, sometimes they have drawbacks similar to smaller community or regional banks. Credit unions are built around common bonds like an employer, community, or church, so if you aren’t part of that community you may not be able to join. Each credit union has specific membership requirements, so make sure to ask how you can join.
In addition, sometimes credit unions don’t offer the same financing options as the big banks. As with membership, make sure you are doing your homework to pick the right partner to meet your needs.
Finally, individual credit unions may not have tons of branches all over the United States. However, through services like the shared branching and ATM networks and online and mobile banking platforms, credit unions can provide you with the access you need to manage your accounts no matter where you go!
The Bottom Line
While credit unions may not be the best fit for every situation, they often can provide a better value option and a more personal experience than many banks.
Not all members will qualify for a mortgage with Nymeo. You must qualify for membership with Nymeo to be considered for a loan. Credit decisions are based on several factors, such as creditworthiness of applicant(s), capacity to repay, and value of collateral.