Although banks are useful for certain financial services, obtaining a residential mortgage is not one of them. While you can obtain a mortgage from a bank, the mortgage rates you will receive, even with products like a fixed rate mortgage, will generally be inferior to those you can get by going to a credit union. This is because of inherent differences in how banks and credit unions operate that allow unions to offer better mortgage services to their members.
Why Credit Unions Have a Better Mortgage Approach than Banks
Credit Unions Are Not-for-Profit Organizations
One of the other key distinctions is that credit unions are not-for-profits that exist to serve their members. Although, like banks, credit unions will accept deposits, give loans, and offer other financial services like mortgages, there is a significant difference in how the profits of these services are used. Credit unions are member-owned and cooperative institutions, so any profit they make gets returned to members in the form of reduced fees, higher savings rates, and lower loan rates.
Credit Unions Offer Lower Interest Rates
As mentioned, credit unions find residential mortgages from numerous different sources and are more capable of finding options that match your financial needs. This, combined with the way profits are returned to members, allows for better interest rates to be found and provided. Imagine shopping for a new suit. A bank has a set of five suits in different sizes that you can pick from, and they mostly fit, but they might be too snug or too loose or outside your price range. A credit union will take your measurements, go to its suppliers, and find a suit that matches you best and get a membership discount to boot.
Credit Unions Offer More Flexibility
Credit unions are more flexible than banks when it comes to the types of income or financial background they are able to work with. Due to how credit unions cater to members, there is a stronger personal relationship established, and this trust is part of the reason why a residential mortgage loan would be easier to obtain.
Getting More Mortgage Options from LUSO Federal Credit Union
LUSO Federal Credit Union is a member-owned, not-for-profit financial cooperative that is dedicated to providing members with quality financial services and products, including residential mortgages. We are a staple institution of Hampden County and take strides to help community members make a successful transition to home ownership through various mortgage products such as:
• Conventional fixed rate first mortgages
• Adjustable rate mortgages
• Jumbo first mortgages
• Home equity loans
Feel free to contact our Ludlow branch toll free at 1-844-LUSO-FCU or our Wilbraham branch at 1-800-808-5876 if you would like to learn more.