Wednesday, August 10, 2022

Do Credit Unions Give Better Mortgage Rates

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Top Credit Unions In British Columbia

Credit unions: Everything you need to know

As mentioned earlier, British Columbia is home to a large and healthy contingent of credit unions operating in the province. In fact, three of the five biggest cooperative lenders in the country lend in British Columbia.

Some of the top British Columbia credit unions include:

  • Coast Capital Credit Union
  • Vancity
  • Prospera Credit Union
  • Salmon Arm Savings Credit Union

Some of the lowest mortgage rates in British Columbia can often be found from credit unions, particularly through their mortgage promos during the busy spring homebuying season.

If youre shopping for a home, dont rule out a mortgage from one of British Columbias top credit unions. If youre able to grab a great mortgage deal, it could be worth making the switch from your big bank or existing financial institution.

The Credit Union Mortgage Process

The reason why you might prefer working with a credit union to secure your mortgage starts before a mortgage rate is even determined. It often begins with the process.

If you’re currently a member of a credit union, they have access to your financial data, so there’s often less information that needs to be provided during the application. This frequently leads to a more manageable and speedier approval process.

Also, the high-quality customer service credit unions are known for having what you need to make it through a time that might be a bit stressful. While buying a home can be exciting, the process can sometimes be time-consuming and nerve-wracking, so working with people who strive to make it as smooth as possible for you makes everything better.

May Not Service Your Mortgage After It Closes

In many cases credit unions sell your mortgage to a third party after your loan closes which means that the credit union may not service your mortgage. For example, you may make your monthly mortgage payment to your mortgage servicer instead of the credit union that funded your loan. Additionally, if you have a question about your loan terms, monthly payment or mortgage balance after your loan closes you contact your mortgage servicer and not the credit union. Credit unions still serve as a helpful resource after your mortgage closes, especially if you are considering refinancing, but most borrowers interact primarily with their mortgage servicer which may diminish the value of your relationship with the credit union.

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What Else Does A Credit Union Do Better

Its known that if you have a strange circumstance, you probably want to go to a credit union. Unlike mortgage lenders, credit unions dont have investors buying their loans. This means the credit union doesnt have to answer to anyone they can make their own rules. Sometimes those rules help the borrowers that have unique circumstances, such as high debt ratios, low credit scores, or low down payments.

Of course, theres no guarantee that a credit union is going to provide you with a better rate than a bank. Only you will know that answer after you shop around with various banks, credit unions, and mortgage lenders.

As you compare your loan offers, make sure you compare the interest rates, closing costs, and APR. Sometimes a lender may seem like they charge excessively low interest rates, only to find out that the closing costs are off the charts. You need to decide which situation suits you the most and go from there. Dont just assume that you got the best rate available because you went to a credit union instead, shop around and truly compare your options to see what works for you.

Definitions For Single Family Loan Amounts

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  • Conforming Loan Limits: Maximum loan amount $647,200
  • Super Conforming/High Balance: Loan amounts over $647,200 to a maximum of $970,800
  • Jumbo Loan Amounts: Loan amounts over $970,800

Its smart to spend time investigating which mortgage is right for you, especially with the variety of loan products we offer to suit your needs. Whether youre purchasing a new home or refinancing your existing home, selecting the right loan type is crucial.

Recommended Reading: Can You Refinance A Mortgage Without A Job

How To Join A Credit Union

You must meet the eligibility requirements in order to become a member of a credit union.

Generally, provincially regulated credit unions require that you:

  • Are at least the age of the majority in your province
  • Are a resident of the province*
  • Are willing to buy an equity share in the credit union
  • Have not declared bankruptcy in the past 7 years

Each member has an equal say in the election of the Board of Directors.

*Federally incorporated credit unions accept anyone who is a resident of Canada.

What Are The Drawbacks Of Credit Union Mortgages

Some of the drawbacks to consider before applying for a mortgage at your local credit union:

  • You can only apply at a credit union you are a member in it.
  • There are limits to the amount you can borrow up to 320,000 for Dublin, Cork, Kildare, Galway, Louth and Meath and 250,000 for everywhere else. With the house prices at the moment, this amount is very restrictive.

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The Pros Of An Online Bank

Here are two benefits of a brick-and-mortar bank:

  • Competitive APYs: Online banks tend to have some of the most competitive yields on savings account and money market accounts. They are also usually competitive on CDs and some checking accounts.
  • A fee-free experience: Online banks usually dont have minimum balance requirements or charge a monthly maintenance fee.
  • The Benefit Of Lower Credit Union Mortgage Rates

    CU Members Mortgage – A Better Mortgage

    There’s no doubt that credit unions are known for offering lower mortgage rates to their members. But why?

    The primary reason is that credit unions are not-for-profit organizations. Unlike banks and other online lenders, their not-for-profit status allows them to offer lower interest rates to their members. Members are also part owners, so as a member, you have a right to vote on what’s important to you.

    Low-interest rates are often a common desire amongst members. A lower interest rate of even a few tenths of a point can save you tens of thousands of dollars over the life of your mortgage.

    Here’s an example of the difference in interest rates for a $350,000 mortgage with a 30-year fixed-rate loan using a mortgage loan calculator.

    According to the National Credit Union Association, NCUA, the national average rate for a credit union mortgage was 3.91% in September 2019.

    Mortgage – $350,000

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    Mortgage Lender Vs Bank

    Specialized lenders that only do home loans like Rocket Mortgage or Better Mortgage are generally lumped into the bank category.

    Theyre direct lenders, just like big banks. However, they dont offer other financial services like credit cards or checking and savings accounts.

    These types of lenders typically only do home purchase and refinance loans. They might also offer home equity loans or home equity lines of credit.

    Often, though not always, mortgage lenders are less conservative than banks. So they might be more flexible about outsidethebox applicants, like those with lower credit scores or bigger loan amounts.

    For instance, New American Funding a mortgage lender allows credit scores as low as 580 for FHA loans, whereas Wells Fargo a big bank requires at least 600.

    Another specialized mortgage company, Caliber Home Loans, can do jumbo loans with as little as 5% down payment. Youd be hardpressed to find a big bank that would go so low.

    When it comes to rates, theres no hardandfast rule about mortgage lenders vs. banks.

    The rate youre offered has more to do with your qualifications credit score, down payment, loan amount than the specific lender. So make sure you shop around with a few different companies to see which can offer you the best deal.

    Cons Of Getting A Credit Union Mortgage

    The benefits of credit unions arent as apparent when searching for mortgage rates, because credit unions dont have the marketing scale banks have, which is why they generally dont appear in searches for low rates, says Rich Arzaga, founder and CEO of Cornerstone Wealth Management in San Ramon, California.

    The cons of getting a mortgage through a credit union include:

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    Best For Military Members: Navy Federal Credit Union

    • DoD reservists, civilian employees, civilian retirees and annuitants
    • U.S. Government employees and DoD contractors assigned to DoD installations
    • Family and household members of the groups above

    Locations: NFCU has 341 branches in 31 states and is based in Vienna, Virginia.

    Mobile and online features: Members can access common mobile and online features, including mobile check deposits, bill pay and transfers. Plus you can send and receive money with Zelle.

    Noteworthy financial products: NFCU credit cards received the highest overall satisfaction score in J.D. Power’s 2019 Credit Card Satisfaction Study, excelling in terms, benefits, services and rewards.

    The Visa Signature® Flagship Rewards Credit Card is a standout offering. Cardholders enjoy a complimentary year of Amazon Prime, a reasonable 9.99% to 18.00% variable APR and up to $100 credit for Global Entry or TSA PreCheck applications every four years.

    NFCU also offers a range of other credit cards, checking and savings accounts, personal, auto and student loans, mortgages and more.

    Youre Our First Priorityevery Time

    UW Credit Union 2019 Review

    We believe everyone should be able to make financial decisions with confidence. And while our site doesnât feature every company or financial product available on the market, weâre proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward â and free.

    So how do we make money? Our partners compensate us. This may influence which products we review and write about , but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services.Here is a list of our partners.

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    Who Regulates Credit Unions In Canada

    A majority of credit unions in Canada are provincially regulated.

    For example, in Ontario, they are regulated by the Ministry of Finances Financial Services Commission of Ontario in accordance with the provinces Credit Unions and Caisse Populaires Act, and the Deposit Insurance Corporation of Ontario.

    All credit unions are also members of a deposit insurance corporation that guarantees members deposits more on this below.

    British Columbia Mortgage Rates

    British Columbia is not only internationally renowned for its natural beauty, but also home to several of Canadas largest and most expensive real estate markets.

    Mortgage shoppers in British Columbia are able to take advantage of the second-most competitive mortgage market in the countryafter Ontarioand as a result, can often find among the best mortgage rates in Canada.

    There are more mortgage brokers per capita competing for business in the province, which also boasts a strong credit union presence. Both of these market segments compete head-to-head with the big banks, stoking competition that helps drive down mortgage rates.

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    How Credit Unions Work

    Each individual credit union member is an owner in equal part of the institution.

    • Live in a specific geographical area
    • Work in a specific field
    • Work for a specific employer
    • Belong to certain groups
    • Have a family member whos already a credit union member

    You must hold a minimum number of membership shares of the credit union upon joining, typically for a nominal deposit of somewhere between $5 and $30.

    The result is a cooperative structure with a strong framework to help them accomplish their financial goals. For example, member deposits can be loaned out to another member as a home loan, providing the borrower with financial flexibility and a good return to the depositor and the credit union.

    Pros Of Credit Unions

    PenFed Credit Union Mortgages – Great Rates for Everyone (15-Second Spot)

    1. Higher Interest Rates

    generally pay interest rates more than big banks when it comes to savings and other kinds of deposits. However, online banks tend to pay more interest rates compared to credit unions.

    As a plus, unions sometimes do pay interest on a chequing account balance

    2. Lower Fees

    When compared to the big banks, service account maintenance and fees are cheaper. Credit unions offer its members a no-fee chequing account including no-minimum balance banking.

    Some Canadian , fees are quite competitive with their big bank rivals.

    3. Better Rates

    With having the interest of its members at heart, better rates are always offered. Mortgage, credit, and personal loans are offered to its members at competitive rates.

    4. Customer Service

    are known to provide excellent one-on-one customer services over their competition .

    In fact, in the year 2019, Canadas were awarded the top honours in the Ipsos Financial Service Excellence Awards for Customer service. Canadas have received this award for 15 years in a row.

    5. Community Development

    offer sponsorship to different programs and projects within their local community. These supports are rendered to also indirectly assist their members who reside in the community.

    Many of the are caught endorsing actions that will bring about development and sustainability towards its local community.

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    Online Services And Technology

    Large banks tend to have more money to spend on technology, and as a result, they are known for adding technical services much more quickly than credit unions. Mobile banking services are likely to be far more advanced at banks. If technology and online banking are keys to your choice, make a list of your must-have services and ask for a demonstration of them before opening an account at a bank or credit union.

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    Mortgage Loans

    Mortgage loans are offered through our partnership with Member First Mortgage, a full-service mortgage lender with more than 50 years of combined experience. From fixed-rate to adjustable, we offer a wide range of mortgage term and rate options customized for your needs.

    • Saves you money with competitive rates

    • Saves you time with an easy application process and pre-approval options

    • Flexible terms

    • Wide variety of mortgage types

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    Greater Texas Credit Union Mortgage Loans

    Greater Texas Credit Union offers six different types of mortgages, including conventional, FHA, and VA loans. Moreover, we offer loan terms in a variety of increments: 10 years, 15 years, 20 years, and 30 years.

    The best part is you dont have to navigate these options on your own. Our loan officers will guide you through the process, answering all of your questions.

    Additionally, you can visit our online mortgage center to find all the resources to equip you for the homebuying process. There you can check out the following:

    • Find out how much home you can afford and calculate how much you would qualify for as well as your mortgage payment.
    • Our mortgage checklist gives you a comprehensive list of everything you need to apply and qualify for a home loan.
    • Get the home buying basics from our learning center, which includes a mortgage glossary, how to get a loan, and types of loans.

    If buying a home is on your bucket list, but you are still working on improving your credit, Greater Texas Credit Union offers its members a , a four-step program that helps you gradually repair your credit.

    More questions about credit union mortgage loans? Weve got you covered!

    Flexible Solutions Competitive Rates

    Do Credit Unions Offer Better Mortgage Rates?

    When it comes to borrowing, you cant beat the low-interest rates offered by a credit union. If you arent convinced youre saving by going small and local, check out the NCUAs report on average interest rates

    Most Credit Unions*

    48-month new car loan 2.58%

    48-month used car loan 2.75%

    5-year home equity loan 4.42%

    48-month new car loan 4.62%

    48-month used car loan 5.16%

    5-year home equity loan 5.02%

    *Partners Financial FCU rates are even lower!

    Not enough of a difference in rates to make the switch to a credit union for your savings and lending needs?

    If you have less than stellar credit but need a loan, credit unions can often work with members. If youre thinking about applying for a credit card, credit unions charge less in fees, offer no interest on balance transfers and provide additional incentives.

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    Why You Should Get Your Mortgage From A Credit Union Instead Of A Bank

    Theyre about community and bringing people together who believe in service to one another. Its one of the reasons our name is United. Here are a few reasons to use a credit union when you shop for a mortgage.

    LOWER FEES AND INTEREST RATES

    The same logic applies to fees. At United, we work hard to make them reasonable. When you shop for a mortgage with us, we dont overload you with appraisal, origination, processing, tax service, and underwriting fees. Case in point: Uniteds total mortgage fee is $970, while other lenders may charge up to $4,000. The real question is, what are you going to do with an extra $3,000 in the bank?

    EASIER CREDIT APPROVAL

    Credit unions understand if your credit score isn’t perfect. They dont let less-than-perfect credit stop you from securing a mortgage or making a modest down payment. According to the National Credit Union Administration, the median credit score to secure a mortgage with a credit union was 753, lower than the median score for banks.

    FRIENDLY LOCAL EXPERTS

    United believes in making the community a better place through its great financial products and excellent service. Thats because we are a not-for-profit institution. We focus on guiding Members, which includes our own employees, to their mortgage goals with friendly expertise every step of the way. Thats also why, even when we have marketing campaigns, we feature our authentic, diverse Members. They are what make us United.

    MEMBER BENEFITS

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