Howard Hanna Real Estate
Howard Hanna Real Estate
Berta J. Smith, Howard Hanna Real EstatePhone: (315) 559-3316
Email: [email protected]

Drawbacks of Financing Your Mortgage through a Credit Union

by Berta J. Smith 12/20/2020

Image by Burst from Pexels

Buying a home is an exciting time. As you start to comb through listings and decide you’re ready to take the plunge to purchase, you’ll want to pursue getting pre-approved for a mortgage. This way, you'll know how much you're approved for and can shop for homes within your price range. Additionally, having a pre-approval boosts your chances of having your offer accepted once you’ve found a house you want to buy. If you aren't already pre-approved, this delays your ability to put in a bid, which means someone else may be the one moving into your dream home.

To get yourself qualified for a mortgage, it’s a good idea to shop around for rates. Many people find they do best with a credit union, however, there are some drawbacks you might want to consider before making your decision of the type of lender you want to work with.

Credit Unions Require a Membership

Unlike traditional banks, credit unions aren’t open to everyone to use. To apply for a mortgage through a credit union, you’ll have to join as a member. The drawback is not just anyone can join. To qualify for membership, you’ll have to be affiliated with a specified organization or meet other designated criteria set by the credit union’s guidelines.

Many people find they are successfully able to locate a credit union they are eligible to join, but it’s not a given. To check to see if you meet the criteria for membership to a credit union near you, check MyCreditunion.gov.

Fewer Branch Networks

Credit unions are community-based non-credit entities. As a result, most of them are geographically concentrated and operate with fewer branches than traditional banks. This means your options may be extremely limited if you want in-person service.

Having a physical branch to visit when you want to resolve problems is a convenience many people often want when working with a financial institution. Consider how important this access to your lender would be to you. If you’re comfortable with strictly phone contact or online options (which might also be limited, depending on the size of the credit union), in-person access may not be an issue for you.

Limited Financing Options

Larger commercial banks typically have a broad range of financing options. While you might find a good rate at a credit union, you’ll typically find far fewer product offerings than you would at a larger bank.

Depending on your individual credit and financial standing, a credit union may not be able to offer you the best interest rates on a mortgage. Additionally, since they are smaller entities, they don’t always have nearly as much cash on hand as traditional banks, which means they might be limited in the number of mortgages they can approve at a given time.

When shopping for lenders to pre-approve you for a mortgage, you have many options between traditional banks, credit unions, mortgage banks and mortgage brokers. If you diligently do your homework, it’ll empower you to find a lender that can meet your financing needs.

About the Author
Author

Berta J. Smith

Roberta J. Smith CNY REALTOR ® - Quality & Service That Stands Out

About me:

• A full-time realtor since 2003

• Specializes in first time home buyers and estate sales

• Understanding the importance of detailed communication with clients

• Consistent Top Producer

• Associate Broker 

• Experienced negotiator

• Lifetime CNY Resident

I have great people skills, especially in a one-on-one atmosphere, and wanted to put those skills to good use. With a career in Real Estate, I am able to help people during one of the most important decision-making times of their life… buying or selling a home. I live with husband and have three children and four grandchildren. As a life-time resident of Central New York, I know my real estate territory very well and will provide the utmost service to my customers. I can tell you all about the school district, the economy of the area, established businesses, landmarks, where to shop and even where you can grab a great burger!

If you are looking to buy or sell a home in the CNY area, including Liverpool, Cicero, Clay, North Syracuse, Baldwinsville, Syracuse & other local markets, I am the agent to call.