Refinancing Mortgage Through A Credit Union: Why You Should Use a Credit Union

Whether you want to leverage your home equity or you’re looking to lower your mortgage rate, refinancing is a great way to help you meet your financial goals. When it’s time to refinance, you don’t have to use the same lender who provided your original mortgage – you can find a new lender. Credit unions offer a wide variety of mortgage options, along with some great benefits too!

If you’re thinking about refinancing, have you considered a credit union? Let’s talk about the benefits of working with a credit union for your refinance transaction.

Credit Union Background

A credit union provides financial services just like a bank, but there are two important differences. When someone opens an account at a credit union, they aren’t just a customer, they’re also now a member. Because credit unions are member-owned, this is a great benefit for members.

The second distinction is that credit unions are not-for-profit organizations. Credit unions return their “profits” to their members in the form of lower fees, lower rates, higher rates on deposits, and more. Some credit unions serve members nationwide, while others focus on a specific geographic area or type of member (like teachers, military members, state employees, and others).

How to Refinance Through a Credit Union

Refinancing takes place when you replace your current mortgage with a new loan. The new loan might have a lower monthly rate, it might be a fixed-rate instead of an adjustable-rate mortgage, or you might take cash out to fund other financial goals. Each transaction varies based on how you want to leverage your equity or change your home loan.

The process of refinancing your mortgage with a credit union is very similar to a refinance transaction with any other lender, but it’s likely that you’ll need to become a member of the credit union. Membership requirements vary by credit union, but usually you’ll just have to open an account and/or pay a small fee.

Once you become a member, you may also have the right to vote on things like credit union board members or other important initiatives. If you’re curious about our membership options, talk with a loan officer today.

Once you become a credit union member and you start the loan process, you’ll be asked for various documents related to your financial and employment history. As part of the refinance process, you will be asked to provide bank statements, employment pay stubs, tax returns, and more, and they will also check your credit score. If you are self-employed, your lender may need additional documentation to identify your income and assets. Depending on your situation, your lender may also need to order an appraisal on your home to determine your home’s value.

After your loan officer reviews all of your documents, they will identify which loan program fits your situation. Whether you’re using your equity to finance renovations, fund college costs, or you want to get a lower rate, refinancing can be a great way to leverage the equity you’ve built in your home.

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Benefits of Refinancing Through a Credit Union

Refinancing your home loan with a credit union can offer important benefits. Because credit unions are not-for-profit, member-owned financial institutions, they can often provide several important benefits.

Potential for lower rates and fees

Since credit unions return “profits” to members, they can often offer lower fees and lower interest rates than other lenders. This all depends on the home owner’s financial situation, as well as the credit union guidelines, but it’s beneficial to talk with a credit union about their refinance options and see if you could save some money on the transaction by working with a credit union.

Focus on customer service

Credit unions are built to serve their members, so many people find that refinancing through a credit union means a more personalized, smooth transaction. Loan officers want to help guide their clients through the process and they are committed to delivering great service.

Less likely to sell loan to another servicer

It’s common for lenders to sell a loan after closing in order to free up money to fund more purchase and refinance transactions for their customers. Credit unions often keep the loan instead of selling it so they can maintain a long-term relationship with the home owner.

Option for a financial one-stop-shop

It’s much easier to manage your financial accounts when they are all in one place! That’s why many people find it convenient to have their home loan, checking, savings, and other accounts with a credit union.

How to Get Started on a Refinance

Ready to learn more about refinancing? Let’s talk!

If you want to have a conversation about your refinance options, our team is always available. Reach out to us at Bellco Home Loans and we can talk about your home financing goals, as well as our available loan options.

What 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.