Credit Union Mortgage Pre Approval: Why It's a Good Idea

When you’re considering buying a home, a pre-approval should be at the top of your list! Smart home shoppers start the process with a pre-approval, even before they start browsing for houses online or checking out open houses. A pre-approval is a great way to show sellers that you are a serious buyer, and it can put you ahead of the competition (which is especially important in a hot real estate market).

If you’re considering financing your home through a credit union, the credit union can issue a pre-approval after you go through the initial process. Here’s your quick overview of getting pre-approved for a mortgage through a credit union.

What is a pre-approval vs. a pre-qualification?

It’s important to talk about the difference between pre-approvals and pre-qualifications. Despite what many people think, these are not the same thing and it’s important to know the difference when you start the home buying process.

With a pre-qualification, you’ll provide your lender with a self-reported overview of your financial situation. This typically includes a description of your income, assets, and debt. Your lender may run a credit check too. The lender will use this initial information to provide a best-guess estimate of your pre-qualification amount. If you’re just curious about what you might be able to afford, or you aren’t sure if you’re ready to buy, a pre-qualification could be a good initial step.

A pre-approval is a more rigorous process, but it’s worth the extra effort if you’re serious about buying a home. Your lender will ask for a variety of financial documents, often including pay stubs, bank statements, tax returns, and more. They will also pull your credit report and analyze it. After reviewing your financial situation, your lender will issue a pre-approval for a specific loan amount. The pre-approval will also outline what your interest rate and monthly payment might look like.

A pre-approval lets sellers know that you are ready to buy, and it often sets you apart from other buyers! It also gives you a clear picture of your potential housing costs, so it’s a great way to confirm what you can afford.

How to get a pre-approval from a credit union

Credit unions offer many home loan options, just like banks or other lenders. However, credit unions function a little differently since they are member-owned, not-for-profit organizations.

Most credit unions have a membership requirement if you want to use their banking or lending services. While the requirements vary by credit union, usually you just need to pay a small fee and/or open an account. Depending on the credit union, you may need to become a member before the credit union issues a pre-approval.

Start the process by finding a loan officer and talking with them about your home financing goals. After learning more about what you’re looking for, your loan officer can talk about your next step in the pre-approval process.

The credit union mortgage process

After your loan officer issues a pre-approval, they might request more financial information to continue the loan process. Your loan officer will then order an appraisal on the home so an independent appraiser can assess the home’s value. The next step in the process is moving your loan to underwriting to make sure the loan fits the program guidelines. After all of these items are finalized, you’ll be ready to close!

Benefits of credit union mortgages

Credit unions sometimes offer flexibility that big banks can’t offer because credit unions are focused on customer service. Since credit unions are not-for-profit organizations, many also offer lower rates on mortgages, as well as reduced fees.

Credit unions are a popular choice for home loans because of their dedication to customer service. They take their members’ needs seriously, and it’s very beneficial to have a loan officer who is focused on customer service when you’re going through the home loan process.

Many lenders sell a loan to a new servicer after the loan closes – this allows them to free up capital to lend to new home buyers. However, credit unions often keep their loans instead of selling them because they want to maintain a long-term relationship with their members.

Keep in mind that these benefits differ depending on the credit union, so have a conversation with your loan officer about what types of benefits the credit union might offer.

The bottom line

Credit unions are a great option for many home buyers – and a pre-approval is the first step in getting you into your dream home! When you’re serious about buying a home, check out your mortgage options with a credit union.

Curious about how much house you might be pre-approved to buy? Reach out to the Bellco Home Loans team! We would love to have a conversation about your options.


Who is Bellco Home Loans?

Bellco Home Loans is a collaboration between Bellco Credit Union and Cherry Creek Mortgage, an independent mortgage lender that’s been helping families attain home ownership for over 30 years. Bellco Home Loans was born from a desire to provide a premier mortgage experience for Bellco’s members by partnering with a leading, locally-owned mortgage company with an established reputation in the community.

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