There are many pros to getting a mortgage through a credit union — if you qualify! If you already do your banking at a credit union, you might have an easy path to a mortgage through your union: but that might not necessarily be the case! Here’s what you need to know.
Credit unions have historically offered lower mortgage rates and closing costs than traditional lenders. Anyone searching for a mortgage to buy a home for sale in Donelson or anywhere else around Nashville can’t turn down that deal. But credit unions also tend to be more conservative in their lending practices, meaning that you might need to jump through more hoops — and have an excellent credit history — to qualify for a loan through one.
Credit Unions Are Nonprofit: They Won’t Make Money Off Your Mortgage
Credit unions, in general, appeal to a vast audience because of their nonprofit, cooperative business model. As a credit union member, you are also a partner (an owner) of the credit union. When you work with a credit union, you know that the people honestly come before profits, and credit unions make certain to treat partners as their number one priority.
Credit Unions Often Have Better Rates
It’s always smart to rate-shop when you’re looking for a mortgage, and you’ll often find credit union mortgage rates win the rate-game, and provide better rates than most other sources.
Credit Unions Typically Close Fast
Many credit unions offer faster closings than other financial institutions. You’re often in the driver’s seat if you can offer a quick closing to your seller. Many sellers want to close quickly to avoid an extra month of carrying costs, which gives you a negotiation advantage if you can accommodate them.
But It Can Be Very Hard to Qualify
Some lenders are more lenient than others, and credit unions generally aren’t on the lenient side. Credit unions’ risk tolerance is typically lower than other lenders’. A borrower’s credit quality will be scrutinized more, and credit requirements may be tighter.
And They Might Not Offer The Right Kind of Loan
Credit unions, small ones in particular, might not offer certain types of specialized loans. Especially if you’re an individual looking for more buyer-assistance specific loans, this might shut down your hopes of using a credit union right out of the gate.
