Buying and owning a house is one of the biggest American dreams, and if you know anyone who has recently purchased a home, you know how difficult it can be. Whether it is your first time or if you are a house flipper, getting a mortgagee seems like a daunting process. Apart from the fact that it is an overwhelming process, the interest rates are also constantly rising – mainly because of the economy at the moment and also because it is becoming increasingly difficult to find a reasonable interest rate in this market.
If you have been in the market scouting for a mortgage, you must be aware of the options available to obtain a mortgage. However, not many realize that applying for a mortgage through a credit union is one of the best options. Credit unions are known to have many options that are better suited to potential homeowners.
Credit unions are not as unknown as they used to be – they have now grown in popularity as one the most reliable sources of mortgages. They are now roughly responsible for 9% of all mortgage borrowings. Credit union members are the institution’s collective owners, so they are owned by the people who are members or who avail of their services. Credit unions typically offer lower rates, and their approval process is much easier, with room for allowances and personalization.
Here we have compiled reasons why you should approach a credit union for a home loan instead of a commercial bank.
They Have Better Customer Service
Credit unions like Valley Strong Credit Union are community-oriented, meaning you will be financing your home through a financial institution that knows where you live, work, worship, and attend school. Buying a home is a significant investment, so knowing that you are borrowing from a place that sees you as a member of their community is a great advantage.
They Have Better Rates
Being a credit union member is like being part of a community – you are doing more than just banking. Being a credit union member has a slew of benefits – lower monthly payments made possible by competitive interest rates on the loans are just one of the many advantages that credit union members enjoy.
Since credit unions are not profit-making institutions and are not interested in keeping their profits for themselves – they distribute the profits to the members through higher savings dividends and lower rates for loans.
Another benefit you will have working with a Credit union is that they will work with you to raise your credit score, even if it takes some effort in order to get the best rates.
They Have Fewer Extra Fees
Apart from the interest homeowners pay on the mortgage, additional expenses like origination fees and insurance are common if you work with commercial banks. Although every institution is different, you can be assured knowing there won’t be any additional costs if you get a loan from a credit union.
They Have Internal Servicing
If you borrow from a credit union, you will benefit from a quick pre-approval process for their fixed mortgage, which takes the edge off looking for your dream home. Credit unions provide in-house servicing, simplifying the mortgage process, like application and payment, and making it a breeze. Credit unions typically hold the loan themselves and are not subject to the fluctuations of interest rates that commercial banks are known for. So if you have a loan with a credit union, your loan stays put and is in safe hands.
They Are Member Owned
Being a credit union member is like being part of a community or a family. Membership here offers some intangibles in addition to financial advantages. Participating in the community means joining a larger and more meaningful community. And being valued as a member is much better than being just an account number or a customer code at commercial banks.
Although it is a big step for you to take out a loan and buy your dream house, it is in the littlest of things that true value lies. Things like shorter waiting and processing times mean a lot to most people. And unless you visit a place that values their customer, and you’re not just another face in the crowd – you won’t realize how important these little things are.