Drawbacks of Financing Your Mortgage through a Credit Union

by Angel Turner 02/23/2020

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Buying a home is an exciting time. As you start to comb through listings and decide you’re ready to take the plunge to purchase, you’ll want to pursue getting pre-approved for a mortgage. This way, you'll know how much you're approved for and can shop for homes within your price range. Additionally, having a pre-approval boosts your chances of having your offer accepted once you’ve found a house you want to buy. If you aren't already pre-approved, this delays your ability to put in a bid, which means someone else may be the one moving into your dream home.

To get yourself qualified for a mortgage, it’s a good idea to shop around for rates. Many people find they do best with a credit union, however, there are some drawbacks you might want to consider before making your decision of the type of lender you want to work with.

Credit Unions Require a Membership

Unlike traditional banks, credit unions aren’t open to everyone to use. To apply for a mortgage through a credit union, you’ll have to join as a member. The drawback is not just anyone can join. To qualify for membership, you’ll have to be affiliated with a specified organization or meet other designated criteria set by the credit union’s guidelines.

Many people find they are successfully able to locate a credit union they are eligible to join, but it’s not a given. To check to see if you meet the criteria for membership to a credit union near you, check MyCreditunion.gov.

Fewer Branch Networks

Credit unions are community-based non-credit entities. As a result, most of them are geographically concentrated and operate with fewer branches than traditional banks. This means your options may be extremely limited if you want in-person service.

Having a physical branch to visit when you want to resolve problems is a convenience many people often want when working with a financial institution. Consider how important this access to your lender would be to you. If you’re comfortable with strictly phone contact or online options (which might also be limited, depending on the size of the credit union), in-person access may not be an issue for you.

Limited Financing Options

Larger commercial banks typically have a broad range of financing options. While you might find a good rate at a credit union, you’ll typically find far fewer product offerings than you would at a larger bank.

Depending on your individual credit and financial standing, a credit union may not be able to offer you the best interest rates on a mortgage. Additionally, since they are smaller entities, they don’t always have nearly as much cash on hand as traditional banks, which means they might be limited in the number of mortgages they can approve at a given time.

When shopping for lenders to pre-approve you for a mortgage, you have many options between traditional banks, credit unions, mortgage banks and mortgage brokers. If you diligently do your homework, it’ll empower you to find a lender that can meet your financing needs.

About the Author
Author

Angel Turner

As a Realtor® licensed in Georgia, Angel stands behind her commitment to excellence. As a former teacher and leader, Angel combines her passion for helping others and her love of education to give her clients a unique, familial experience. Her business is built on Communication, Education, Determination and Trust, while embodying the ability to cater and adapt to all the needs of her clients.

Angel’s goal is to assist her clients with all their Real Estate needs, as she aims to make each transaction pleasant, educational, and peaceful. Angel realizes every need is different, so she offers an arsenal of resources to accommodate those needs, taking the stress out of what could be a worrisome endeavor. Whether you are looking to buy or sell your home, Angel is motivated to ensure a personalized experience with exceptional service. What makes this so rewarding for her is her passion to be a part of such a personal journey with her clients. She aims to help buyers find the “IT” place, as well as assisting sellers in getting the price they desire. Angel pledges to uniquely serve all your Real Estate needs with excellence - you can count on it!