Is it Easier to Get a Mortgage Through a Credit Union?

If you’re starting the home purchase or refinance process, you might wonder what type of lender works best for you. A credit union is a great option for home buyers or home owners who are interested in a personalized experience when they purchase or refinance a home.

Many people wonder if it’s easier to finance a home through a credit union. Let’s talk about a few things you can expect if you are curious about getting a mortgage through a credit union.

What is a credit union?

Credit unions are financial institutions that function like banks, but with two important distinctions: credit unions are member-owned and they are not-for-profit organizations. When you open an account at a credit union, you don’t just become a customer – you’re now a member too. While the benefits differ based on the credit union, many organizations return their “profits” to members in the form of low rates on loans and higher interest rates on deposits (along with member-focused customer service).

Credit unions vary in size and product offerings. While some credit unions are nationwide, the majority serve a dedicated state or geographic area. Also, some credit unions specialize in serving a specific type of member, like military members, teachers, state employees, and more.

Is the mortgage process the same through a credit union?

Yes! As far as the documentation required, the loan program restrictions, and the rest of the mortgage process, those things will be very similar no matter where you get your home loan. You’ll need to provide financial information, credit score details, employment documentation, and other required information in order to qualify for a home loan. After you provide your financial documents, your loan officer will let you know which loan programs might work for you.

One important thing to remember is that customer service is paramount to credit unions, so you may find that financing your home through a credit union is a more personalized experience. Don’t underestimate the impact your lender has on your transaction – finding a lender who is committed to customer service can make your home purchase or refinance transaction much easier.

Are there different requirements for credit union mortgages?

The requirements for a mortgage will be the same, but keep in mind that most credit unions have a membership requirement. It’s likely that you’ll need to become a member first – usually you just need to open an account with the credit union and/or pay a small fee.

Is it easier to qualify for a mortgage through a credit union?

Because credit unions sometimes have more flexibility than larger banks when it comes to mortgage lending, it may be easier for someone to qualify for a mortgage at a credit union. Keep in mind that you’ll still have to meet all of the requirements for the loan program in order to qualify for a mortgage.

Home buyers who have an established relationship with a credit union often find that the mortgage process is easier. It’s more efficient for the loan officer at the credit union to verify income and credit scores if the home buyer banks at the credit union too. This is also an important benefit when you’re looking for a mortgage, as it’s helpful to work with someone who knows the local area and the real estate market.

What are the benefits of a credit union mortgage?

We’ve already discussed the customer service benefit, but there are others too. Many credit unions offer lower rates and fees since they are not-for-profit organizations. Just remember that these vary based on the credit union and the loan program.

While it’s common practice for lenders to sell a home loan after closing to free up more capital to lend to new customers, credit unions often keep home loans because it’s a great way to maintain a long-term relationship with members. It’s also easier for members because the loan won’t be transferred to different servicers throughout the life of the loan.

Don’t forget about the convenience of having all of your financial accounts in one place – from checking and savings accounts to car loans and home loans, it can be easier to monitor if you don’t have to check multiple banks and accounts.

The Bottom Line

A credit union may be able to offer additional flexibility when you’re applying for a home loan, and many credit unions provide their members with lower fees and favorable rates. Credit unions are passionate about serving their members, so the home loan experience (whether purchasing or refinancing) is often more personalized.

If you’d like to learn more about getting a mortgage through a credit union, get in touch with us at Bellco Home Loans today! We would love to have a conversation about how we can support your home financing goals.

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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