credit union mortgage vs bank mortgage

If your union provides a bank account facility, it'll operate very much like a Basic Bank Account. Mortgages. These are only offered by a few. Credit Union vs Bank · 1. Lower Fees · 2. Better Savings · 3. Lower Loan Rates · 4. Local Experts · 5. Commitment to Members · 6. Elected Board of. 4.50% for credit unions) and 15-year loans (3.92% vs. on conventional mortgages, while Wells Fargo Bank was offering the same loan at a.
credit union mortgage vs bank mortgage

: Credit union mortgage vs bank mortgage

Credit union mortgage vs bank mortgage
credit union mortgage vs bank mortgage

Mortgage Lenders vs. Banks: What's the Difference?

You’ll find plenty of places to get a mortgage loan when you’re ready to finance your home purchase. Two of the most common options are dedicated non-bank mortgage lenders, such as Quicken Loans and SoFi, and large banking institutions, like JPMorgan Chase and Wells Fargo. Each offers something the others don't, so your choice could depend on your priorities.

What's the Difference Between a Mortgage Lender and a Bank?

Mortgage LendersBanks
Offer a variety of loan optionsHave fewer loan options
Have more lenient credit requirementsTend to have strict credit requirements
May sell your mortgage loan to another lender after closingYou'll pay and work with the same bank throughout the life of your loan

Both banks and mortgage lenders can help you get the funds you need to buy your home, as long as your credit, income, and debts meet their qualifications. But they each come with a unique set of pros and cons. 

Mortgage lenders usually offer a larger variety of loan options, and they can be more forgiving of borrowers with damaged credit. Banks typically have fewer loan options and stricter lending criteria.

The best fit for your purchase will depend on your unique home-buying scenario, your finances, and your goals. 

Which Is Right for You?

You may find it easiest to simply reach out to a local banker to assist you with the home loan process if you already have a relationship with a bank. But dedicated mortgage lenders are grabbing an increasingly large share of the home loan market due to their flexibility and speed in closing loans.

Banks: Pros and Cons

Banks often offer special benefits or discounts to their existing banking customers. They may even have proprietary in-house loan options designed for specific buyer segments, such as self-employed buyers or investors.

Banks may try to promote other financial products throughout the loan process in order to maximize revenue. This could include offering specific savings or checking accounts, credit cards, or other products in exchange for more favorable mortgage terms.

The major downside of bank loans is that they often come with stricter lending standards because they’re subject to federal compliance and reporting laws. This might make it harder for you to qualify if you have less-than-perfect credit or a major financial event (like a foreclosure or bankruptcy) on your record. It also usually takes longer to close on a bank loan.

  • May have lower interest rates

  • May offer special rates or benefits to existing bank customers

  • The bank will most likely continue servicing your loan after closing

  • May offer proprietary and niche-specific loan programs

  • Stricter lending standards

  • Less variety of loan products

  • Less mortgage lending expertise

  • More fees due to increased compliance requirements

  • Cross-selling of additional banking products

  • Longer closing times

Mortgage Lenders: Pros & Cons

These lenders are often less strictly regulated than banks, so they're able to customize loan recommendations to the buyer’s exact financial needs and home-buying goals. Loan originators with mortgage companies are required to pass several mortgage-related courses and exams, giving them a deep level of knowledge in the field.

Some of these mortgage lenders are only available online, so you might not get the same amount of hand-holding in terms of customer service.

Mortgage lenders often sell mortgage servicing rights on their loans to servicing companies after closing. That means you won’t have control over who you ultimately pay or work with, although the rates and terms on your mortgage credit union mortgage vs bank mortgage change after the sale.

  • More lending expertise and training

  • More loan options

  • Better loan guidance and advice

  • More willing to negotiate on terms

  • Faster loan closing

  • May not have a physical location

  • The lender may sell your loan to another servicer after closing

A Best-of-Both-Worlds Option

The majority of mortgages are sold by designated mortgage lenders and banks, but other options exist that are sometimes hybrids between the two. You might consider a financial technology firm, as well as a credit union, savings and loan association, or credit union mortgage vs bank mortgage smaller financial institution.

Mortgage loans can come from numerous sources. They're not limited to banks and mortgage lenders. Stock brokerages and private individuals can also provide home loans.

You might also consider seller-financing for your home purchase, where the home’s seller agrees to let you purchase the property over time, via monthly installments. These types of loans typically come with higher interest rates due to the bigger risk they pose to the seller, however.

The Bottom Line

Lenders, banks, and otherfinancial institutions all come with their own benefits and drawbacks. Make sure to shop around to ensure that you get the best loan for your purchase. Get quotes from several different lenders, banks, and organizations, and compare the rates, fees, and closing costs required by each.


Mortgage Brokers vs. Banks: Which Is Better?


mortgage brokers vs banks

There are a variety of different ways to obtain a mortgage, but let’s focus on two specific channels, “mortgage brokers versus banks.”

There are mortgage brokers, who work as middlemen between banks/mortgage lenders and borrowers on the wholesale end to secure financing for homeowners.

And there are banks/lenders that work directly with homeowners to provide financing on the retail level, known as consumer-direct lending.

Mortgage brokers are a big part of the mortgage business, accounting for more than 10 percent of all home loan originations, give or take.

In fact, their share of the mortgage pie was as high as 30 percent during the mortgage boom, but fell precipitously after the mortgage crisis ensued.

But brokers still serve an important role in the industry, and can be quite beneficial for both prospective homeowners and those looking to refinance a mortgage.

There Are Pros and Cons to Both

  • Both can be a good choice for home buyers and existing homeowners
  • But it depends on your loan scenario and your individual needs
  • It doesn’t need to be an either/or discussion when shopping for a home loan
  • Compare the two to ensure you receive the lowest interest rate and fees

There are pros and cons to both, and sometimes you will have little choice between the two if you have poor credit or a tricky loan scenario.

The majority of homeowners turn to banks or large mortgage lenders when it comes time to get a mortgage.

They are the most obvious choice, mainly because home loan services are usually offered at the customer’s primary banking institution.

This provides for one-stop shopping, not to mention some level of trust and ongoing engagement. In short, it’s the easy answer for someone looking to submit a mortgage application.

However, borrowers who have trouble qualifying for a mortgage or need to finance tricky deals will often get turned away at the big banks that don’t necessarily specialize in home mortgages.

So for these people, using a mortgage broker is often the next best option.

Brokers Good for Tricky Scenarios and Unique Loan Programs

Brokers typically have access to far more loan products and types of loans than a large-scale bank, whether it’s FHA loans, VA loans, jumbo loans, a USDA loan, or simply a borrower with bad credit.

Meanwhile, an institution like Bank of America might only offer conventional mortgages, such as those backed by Fannie Mae and Freddie Mac.

If you go with a broker, you might wind up with a more personalized loan experience, where they can carve out solutions to your problems, whether it’s a low down payment, limited credit history, or the desire to limit closing costs and/or avoid mortgage insurance.

You might feel a bit more involved in the mortgage process versus using one of the big financial institutions out there, though not everyone wants to speak to a human being, or see them face to face.

There are plenty of mortgage companies and online mortgage lenders that pride themselves on doing things remotely, via email or even text. No phones required! Well, smartphones yes, actually dialing them no.

We’re already seeing this trend with companies like Quicken Loans and their Rocket Mortgage. Some of the biggest and best mortgage lenders are even trying to digitize the entire mortgage process.

A Broker May Provide a More Personal Experience

The application processes might also be quite different. A big bank might just tell you that your credit score is too low, whereas a broker may explain how credit scoring works.

Then make recommendations like paying off some credit cards or student loans to make you eligible in the future.

The takeaway is that a big bank probably won’t go the extra mile for you, whereas the broker might find solutions if/when any roadblocks present themselves.

And part of the reason is because a broker can turn to different lending partners, whereas a bank is at the mercy of its single suite of loan programs. They can’t shop your loan elsewhere.

So for someone who might need a helping hand, or simply wants more attention, perhaps a first-time home buyer, a mortgage broker might be the better option.

Conversely, if you know what you’re doing and have obtained a home mortgage in the past, and have a pretty straightforward loan, online consumer-direct mortgage lenders might be the best route, at least in terms of pricing.

What About the Interest Rates?

  • Brokers can offer lower mortgage rates, but not in all cases
  • It depends on their compensation and the wholesale banks they are approved to work with
  • Always compare retail and wholesale interest rates to ensure you don’t pay too much for your home loan
  • There are expensive banks and brokers out there, and also cheap ones

Pricing with mortgage brokers can be just as competitive as a bank, as long as the broker doesn’t take too much off the top.

By that, I mean not setting a super-high compensation level where they make several points per loan, thereby nullifying any advantage they had over a bank.

Wholesale rates can actually be much cheaper than retail interest rates you’ll get with banks, meaning a lower monthly mortgage payment.

For example, I knew a mortgage consultant who worked at a Wells Fargo retail bank branch (example of using a bank directly), and her mortgage rates were much higher than Wells Fargo’s wholesale division.

And the only way you could access their wholesale rates was through a mortgage broker.

Of course, most borrowers will attempt to secure financing with their local bank or credit union before turning to a mortgage broker.

Banks are seemingly the more trusted and familiar choice, and often provide borrowers with discounts based on a pre-established relationship.

Because the bank already knows a good deal of information about the client, such as the balance of the borrower’s checking and savings accounts, qualifying can be easier and may result in a lower rate.

These days, there’s also the option of going through a nonbank lender that doesn’t have physical branches or offer deposit accounts, which may result in lower mortgage rates and fees versus banks and brokers.

Pros of working directly with a bank:

– Build off existing relationship (discounts if you have a checking/saving account)
– You already know the banker who will handle your mortgage
– Perhaps more trustworthy, more accountable than a smaller shop
– Lower regions bank personalized card rates in some cases
– Ability to add mortgage to existing banking profile and make automatic payments from linked accounts

Cons of working with a bank:

– Conservative and/or limited loan programs
– Do not disclose the yield-spread premium
– Lengthy process, very bureaucratic and involved
– May make false promises
– They make credit union mortgage vs bank mortgage (some bank loan officers are very green)
– May overcharge you (commission doesn’t need to be disclosed)
– Incompetence (poorly educated about the home loan process in some cases if they’re just general bankers or customer service types)

Veterans may qualify for a $0 down VA loan

Pros of working with a mortgage broker:

– They do all the legwork for you, working on your behalf with the lender
– They compare wholesale mortgage rates from a large number of banks and lenders all at once
– Wholesale interest rates can be lower than retail (bank branch) interest rates
– You get more loan options because they work with numerous banks and lenders
– Brokers can finance tricky deals because of their knowledge and various lending partners
– Are typically easier to get in contact with, less bureaucratic
– Might be able to close your loan faster

Cons of working with a mortgage broker:

– They make mistakes like community food bank country club else
– May overcharge you (how mortgage brokers make money)
– False promises to get your business
– Incompetence (poorly educated about the home loan process in some cases if newbies or simply disorganized)
– May not have access to loan programs with select banks (approval varies considerably)

Your Experience May Vary…

  • Banks and brokers can differ considerably in both service and in price
  • With a broker you get one individual who may come highly recommended
  • If you use a large bank with tons of employees you never know who you’ll get
  • As such your experience may largely depend on the loan officer you’re paired up with

All that said, your experience can really vary based on who you choose to work with.

Some banks and mortgage companies may overcharge you and give you the run-around, while a mortgage broker may do an excellent job and secure a lower mortgage rate for you. And vice versa.

It really depends on your situation and the specific bank or broker you ultimately work with, so be sure to shop around wells fargo atm deposit cash near me ask for references first.

Speaking of, real estate agents will typically refer you to their preferred bank, broker, or loan officer.

You are under no obligation to use them, though they can be helpful to quickly get credit union mortgage vs bank mortgage the mortgage pre-approval process.

Not all mortgage brokers are good or bad, and the same is true with banks.

However, one benefit of using a broker is that the experience is probably a lot more consistent because it’s just one person (and their team), as opposed to a large bank with thousands of employees.

[3 Reasons You Need to Compare Mortgage Brokers Too]

A Big Bank Can Have a Huge Range of Employees

And yes, results can vary even within the same bank. That’s why you see mixed reviews when you check out their past results. Some love them, some don’t love them…

Fortunately, many loan officers employed at retail banks now have their own customer reviews, so be sure to peruse those if deciding between bank and broker. That can take some of the guesswork out of it.

Many brokers are mom-and-pop shops, so it’s easy to read their reviews and get someone on the phone or speak in person if you so desire.

Most of them provide personal service, meaning you’ll have a direct phone number to reach them, and can even visit them in their office if you have questions. You might not find the same level of service at the big banks…

So if you want someone to guide you through the loan process, perhaps it’s your first time buying real estate, a mortgage broker may be a good choice for you. They also tend to hustle a bit more with their commission on the line.

To sum it up, mortgage brokers can be a good option if you’re shopping for a home loan, but you should always compare their rates and service to those of your local bank and credit union just to be sure.

And don’t forget online mortgage lenders that don’t have branches – they might be able to pass those savings onto you.

Read more:How to get the best mortgage rate.


Pros and Cons of Using a Credit Union for a Mortgage


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Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience

Updated October 12, 2020

There are different types of mortgage lenders -- credit unions, big banks, mortgage banks and mortgage brokers -- with each type offering borrowers positives and negatives.  Credit unions are not-for-profit financial institutions that offer a wide range of financial products ranging from deposit accounts to credit cards to mortgages.
Credit unions are usually structured as financial co-operatives with its customers, or members, owning the credit union as opposed to investors or shareholders.  The not-for-profit, co-operative structure of many credit unions reinforces their mission to put members before profits.  In many cases, credit unions are focused on a specific community or demographic such as members of the military, teachers or a city residents.  Examples of credit unions include Navy Federal Credit Union, Pentagon Federal (PenFed) Credit Union and Technology Credit Union.  Many credit unions operate in a single city while others have a multi-state or national presence.
The benefits of using a credit union for your mortgage include attractive loan terms, unique loan programs, superior customer service and more flexible borrower qualification requirements.  The negatives of using a credit union for your mortgage are that you must meet federal reserve bank services routing number lookup requirements to be a member, cross-selling and the credit union may not service your loan.
Borrowers should understand the advantages and disadvantages of using a credit union for their mortgage and shop multiple types of lenders to find the lender and mortgage that is right for them.  

Pros of Using a Credit Union for Your Mortgage

Mortgage pro

Attractive Mortgage Terms

Because of their not-for-profit status and focus on member-customers, credit unions are able to offer attractive mortgage terms as compared to other types of lenders.  For example, credit unions may be able to offer lower mortgage rates and closing costs.  Lower closing costs makes getting a mortgage more affordable while a lower mortgage rate reduces your loan payment and can save you thousands of dollars in interest expense over the life of your loan.

While credit unions usually offer competitive loan terms, borrowers should always shop multiple lenders for their mortgage, even if you have an existing relationship with a credit union or other lender.  The table below compares rates and fees for leading lenders in your area.  We recommend that you compare a mortgage proposal provided by a credit union to proposals offered by different types of lenders.  Comparing mortgage programs and quotes is the best way to save money on your loan.    


Current Mortgage Rates in City of Westminster,England as of December 6, 2021

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Data provided by Brown Bag Marketing, Inc. Payments do not include amounts for taxes and insurance premiums. Read through our lender table disclaimer for more on rates and product details.

Mortgage pro

Unique Mortgage Programs

Credit unions tend to be more innovative than other types of lenders and may offer unique mortgage programs that are only available through the credit union.  Additionally, in some cases credit unions are more aggressive than other types of lenders such as big banks, especially when it comes to low or no down payment programs.  For example, some credit unions offer proprietary mortgage programs that enable you to buy a home with no down payment.  Although no down payment mortgage programs are relatively uncommon, when shopping for a mortgage you should always contact at least one credit union to understand if they offer special programs that meet your unique circumstances and financial objectives.

Mortgage pro

Potentially More Flexible Borrower Qualification Requirements

Some credit unions offer more flexible borrower qualification requirements as compared to other types of mortgage lenders.  For example, credit unions may offer mortgages with lower credit score and down payment requirements or apply a higher debt-to-income ratio which enables borrowers to qualify for a larger loan.  Some credit unions focus on community lending programs that are designed to help low-to-moderate income borrowers get mortgages and buy homes.  Additionally, credit unions are able to apply more flexible borrower qualification requirements in certain cases because they have the ability to keep some mortgages on their books, as opposed to selling the loans to third parties.  When a lender keeps a loan on its books it is called jp morgan investment login portfolio loan.  Lenders such as credit unions have more discretion over the underwriting requirements they apply to portfolio loans, within certain limits, which can allow more borrowers to qualify for a mortgage.   

Mortgage pro

Better Customer Service

The mission of many credit unions is to put their members before profits and this can translate into better customer service when you apply for a mortgage.  Superior customer care can manifest itself in many ways including more attentive and personalized service or a strong advocate who works harder to get your mortgage approved.  Although experiences vary by credit union and loan officer, credit unions tend to be more customer-focused than other types of lenders, especially as compared to big banks.  A potentially better customer experience is another reason why borrowers should contact a credit union when shopping for a mortgage.  

Mortgage pro

Home Equity Loan and Home Equity Line of Credit (HELOC) Experts

Although not directly related to mortgages, credit unions tend to offer highly competitive terms for home equity loans and home equity lines of credit (HELOCs).  Credit Unions may be willing to offer a home equity loan or HELOC  for borrowers with unusual circumstances when other lenders say no.  For example, several credit unions provide home equity loans on non-owner occupied properties whereas other the wild and wonderful white family of west virginia of lenders do not.  Additionally, credit unions usually offer aggressive pricing on home wells fargo commercial online banking login loans and HELOCs.  Borrowers in the market for a home equity loan or HELOC should take advantage of the expertise credit unions possess in this area.

Use the FREEandCLEAR Lender Directory to search by lender type and loan program.  For example, use our directory to find credit unions in your state that offer home equity loans.




Cons of Using a Credit Union for Your Mortgage

Mortgage pro

Membership Eligibility Requirement

You usually have to meet an eligibility requirement to become a member of a credit union.  Some credit unions are focused on military members or residents of a certain city.  For example, you may need to be active or retired military personnel or a relative of military personnel to join some credit unions.  Additionally, some credit unions charge a modest membership fee while others do not.  Borrowers should make sure that they meet the eligibility requirements for a credit union before moving forward with the mortgage process.

Mortgage pro

Cross-Selling of Other Financial Products

Most credit unions offer multiple personal finance products such as deposit accounts and credit cards and some credit unions also offer insurance products through affiliated entities.  While credit unions tend to cross-sell less aggressively than bigger banks, borrowers who select a credit union for their mortgage may be cross-sold other financial products.  In some cases borrowers may receive discounted mortgage terms if they use multiple financial products but you are not required to purchase additional products from your mortgage lender.  You should choose the mortgage with the best terms regardless of other products offered by the lender. 

Mortgage pro

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. mobile home for rent near me pet friendly 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 how do i check my walmart credit card application 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. 

More FREEandCLEAR Resources

Mortgage Guides

Mortgage Lender Options

Review, compare and understand the pros and cons for different types of lenders to select the lender and mortgage that is right for you


Mortgage Rates

Compare mortgage rates and fees for leading lenders near you.  Comparing multiple lenders is the best way to save money on your mortgage


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Money and time-saving advice across a wide range of mortgage topics from an expert with over forty years of industry experience

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“What Is a Credit Union?”  NCUA.  National Credit Union Administration, 2020.  Web.

About the author

Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry


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Effective Date: December 3, 2021

Credit Union Mortgage Rates

We offer 90% financing up to $1M with PMI and 80% financing from $1M - $3M. Loans are NOT locked in at application. A completed application is required prior to locking in.

Rate Lock-ins cannot be accepted by fax.
Rate Lock-ins are only available Monday thru Friday, 10am to 4pm. Your lock-in rate may be different from the rate posted here.

Fixed Rate Mortgage**RateAPR*Payment/ $1,000How to Apply
10 Year (up to 97% financing) Rate2.375%APR*2.51%Payment/ $1000$9.37Apply
15 Year (up to 97% financing) Rate2.375%APR*2.47%Payment/ $1000$6.61Apply
20 Year (up to 97% financing) Rate2.75%APR*2.82%Payment/ $1000$5.42Apply
30 Year (up to 97% financing) Rate3.00%APR*3.05%Payment/ $1000$4.22Apply
Adjustable**RateAPR*Payment/ $1,000How to Apply
5/6 Adjustable Rate2.625%APR*3.09%Payment/ $1000$4.02Apply
7/6 Adjustable Rate2.875%APR*3.13%Payment/ $1000$4.15Apply
10/6 Adjustable Rate3.00%APR*3.15%Payment/ $1000$4.22Apply
Jumbo MortgageRateAPR*Payment/ $1,000How to Apply
15 Year Fixed** Rate2.625%APR*2.65%Payment/ $1000$6.73Apply
20 Year Fixed** Rate3.00%APR*3.02%Payment/ $1000$5.55Apply
30 Year Fixed** Rate3.125%APR*3.14%Payment/ $1000$4.28Apply
5/6 Year Adjustable Rate2.75%APR*3.09%Payment/ $1000$4.08Apply
7/6 Year Adjustable Rate2.875%APR*3.09%Payment/ $1000$4.15Apply
10/6 Year Credit union mortgage vs bank mortgage Rate3.125%APR*3.19%Payment/ $1000$4.28Apply
High Balance***RateAPR*Payment/$1000How to Apply
15 Year Fixed Rate2.625%APR*2.65%Payment/ $1000$6.73Apply
20 Year Fixed Rate3.125%APR*3.15%Payment/ $1000$5.61Apply
30 Year Fixed Rate3.125%APR*3.14%Payment/ $1000$4.28Apply
5/6 ARM Adjustable Rate2.75%APR*3.09%Payment/ $1000$4.08Apply
7/6 ARM Adjustable Rate2.875%APR*3.09%Payment/ $1000$4.15Apply
10/6 ARM Adjustable Rate3.00%APR*3.12%Payment/ $1000$4.22Apply
Home Ready Mortgage**Rate APR*Payment/ $1,000How to Apply
30 Year Fixed Rate3.25%APR*3.30%Payment/ $1000$4.35Apply
No Closing Cost MortgageRate APR*Payment/ $1,000How to Apply
20 Year Fixed Rate3.25%APR*3.32%Payment/ $1000$5.67Apply
30 Year Fixed Rate3.50%APR*3.55%Payment/ $1000$4.49Apply
5/6 Adjustable Rate3.25%APR*3.30%Payment/ $1000$4.35Apply
7/6 Adjustable Rate3.375%APR*3.36%Payment/ $1000$4.42Apply
10/6 Adjustable Rate3.50%APR*3.45%Payment/ $1000$4.49Apply

5 reasons to consider a credit union mortgage

Shopping for a mortgage loan is a great way to save on interest with a better loan rate. In addition to banks and mortgage brokers, home buyers may credit unionalso want to look to mortgage lenders that may be in their neighborhood but can be overlooked: Credit unions.

Along with sometimes offering better mortgage interest rates, credit unions offer other benefits that other lenders may not do so well, such as having low or fewer fees, knowing the local market better and being able to make loans on unique properties.

1 – Nonprofit model means savings for members

Unlike banks, which are designed to make profits for investors, credit unions are not-for-profits that receive a federal tax exemption with their mission to serve consumers. Earnings are put back into the credit union to give members higher savings returns, lower loan rates and lower fees.

Credit unions are set up to serve a common area of membership, such as by geography, employee groups or membership in an organization. Members can be on a volunteer board of directors for the credit union to set rates, fees and other policies.

Finding a credit union near you that you can join shouldn’t be difficult. There are many types of credit unions, and an online credit union finder should help you find one near you.

Maine-based University Credit Union requires members to have some sort of affiliation with the University of Maine, says April Gleason, vice president of lending for the statewide credit union that has nine branches and 27,000 members.

“It may sound like a barrier, but there’s a credit union for everyone,” Gleason says.

2 - Lower fees, but watch interest rates

Credit unions are often very competitive on car loan rates, but can be less so on home loans. This is because car loans are for a much shorter time and thus have less risk than a 30-year mortgage, Gleason says.

watch interest ratesThe savings come in other areas, such as fewer and lower fees through a credit union mortgage. With their goal of passing on their savings to members, credit unions are often very competitive on lending fees.

University Credit Union in Maine, for example, charges $699 in home loan fees, versus $1,500 or more that banks charge in origination fees and other costs in processing the loan, Gleason says. Mortgage brokers can charge $3,000 to $8,000 in fees, she says.

“Every other fee that you would see on our loan documents are third-party fees” that the credit union is required to have, she says.

When shopping for a home loan, consumers should ask what interest rate and fees are charged so that they’re comparing apples to apples.

It’s also important to know that the people you work with at credit unions are mortgage consultants an not fiduciaries, says Brett Anderson, a certified financial planner and president of St. Croix Advisors in Hudson, Wisconsin. That credit union mortgage vs bank mortgage they may not offer the best rates or fees and aren’t obligated to do so.

3 - Less likely to sell your loan

Credit unions are less likely to sell home loans to other lenders, Gleason says, partly because they want to keep a long-term relationship with the borrower.

Home loans are often sold to different lenders or servicers and the move shouldn’t be a problem for most homeowners.

But it can be inconvenient and confusing. Credit union mortgage vs bank mortgage the same loan servicer can save borrowers from late fees if there’s confusion over where to send payments. Escrow problems can also pop up during a transfer.

4 - Knowing the local market

Some homes can be harder to get a loan for than others. Lenders that know the local market, such as credit unions, can be more likely to approve a loan for a unique property that a bigger lender may not know as much about.

In Maine, unfinished Cape Cod-style houses that have an unfinished upstairs are common, Gleason says. Traditional banks may not want to fund such homes, which are cheaper than finished Cape Cods but the new owners may spend money later to finish the work themselves, she says.

“We look outside the box quite a bit on a daily basis,” she says.

5 - Long-term relationships

long term relationshipsIn part to get their other banking business and as a way to follow a mission of serving members, credit unions can offer more personal service.

Gleason tells the story of a home borrower where the home they were buying had a sewer backup during Christmas week, just before the loan was about to close. Officials at the credit union worked with them to keep the loan on track until the sewer problem was resolved so they could feel safe buying the home, she says.

Such personal service is also common at community banks, says Ray Duran, regional sales manager at Quontic Bank in Coral Gables, Fla. While credit unions specialize in everything, Quontic Bank specializes in mortgages and helps customers face-fo-face or over the phone, says Duran, adding that working with other lenders can be frustrating if you can’t get anyone on the phone or are having problems online with the lender.


Difference Between Credit Union and Bank

difference between credit union and bank header image from secny fcu near syracuse ny

Despite years of poor service, many people still default to banks over credit unions. We strongly believe that if people really knew the difference between a credit union and a bank, a credit union would be the obvious choice. 

Difference Between Credit Union and Bank: The tldr Version

  • Banks are for-profit businesses; banks make their decisions to benefit shareholders and make money
  • Credit unions are non-profit organizations; credit union decisions are made by and for the benefit of members like you
  • Credit unions offer better interest rates: credit unions generally have higher rates for savings accounts and lower loan rates
  • SECNY Federal Credit Union offers the same convenient features you're used to, but with local and personal service that the banks are too big to provide. At a bank, you're just a number. At SECNY Federal Credit Union, you're our neighbor. 

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What's the Difference Between a Credit Union and a Bank?

The biggest difference between a credit union and a bank is who the institution is acting in the interest of. 

With banks, their decisions are made to benefit shareholders and make money.

Banks are a for-profit business. 

Banks’ depositors are called "customers". Customers have no ownership interest in the institution. Banks are owned by investors who may or may not be depositors.

Banks are owned and controlled by stockholders, whose number of votes depend upon number of shares owned. Customers don’t have voting rights, cannot be elected to the board, and have no say in how their bank is operated. Directors are selected by current directors or by large block stock acquisition.

Banks’ board members are paid, and do not necessarily reflect the diversity of their customer base.

Banks are open to the general public.

Banks are for-profit corporations, with declared earnings paid to stockholders only.

Banks focus on commercial loans and accounts and services that generate significant income.

Competition between banks prohibits a sharing of resources.

With credit unions, their decisions are made to benefit credit union members.
That's because a credit union is owned and operated by members. Credit unions are non-profit organizations. 

At credit unions, depositors are called members. Each member is an owner of the credit union.

Since credit union members are owners, each member, regardless of how much money they have on deposit, has one vote in electing board members. Members can also run for election to the board.

Credit unions’ boards are credit union mortgage vs bank mortgage of volunteers who reflect the diversity of the membership.

Credit unions are local and are organized to serve the interests of its membership.

Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates.

Credit unions focus on consumer loans and member savings, as well as services needed by the membership.

Credit unions cooperate with other credit unions and share resources to bring convenience and savings to its members. CU Service Centers and the CO-OP ATM Network are just two examples of this cooperation between credit unions.

In the entire history of U.S. credit unions, taxpayer funds have never been used to bail out a credit union.

Credit union deposits are federally insured up to $250,000 by the National Credit Union Administration (NCUA), a branch of the federal government, which is backed by the “full faith and credit” of the U.S. government.

Put Your Money Where They Care.

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Difference Between Credit Union and Bank: SECNY Supports Local Business

Credit unions like SECNY Federal Credit Union offer personal and local service that the banks are often too big to provide. SECNY Federal Credit Union offers services that are made to specifically benefit the community that we're a part of, including:

  • Small Business Accounts to Help Entrepreneurs
  • Benefits for Teachers and School Employees Who Shape the Next Generation
  • Members Are Credit Union Shareholders. The money that credit unions bring in goes back to their members in the form of additional services and benefits, such as generally lower loan rates and higher savings rates. 
  • Credit Unions Are Governed by Non-Paid Volunteers

In addition to credit unions acting in the best interest of its members, the average bank charges more in fees than SECNY Federal Credit Union. A comparison between the average bank fee per service and SECNY FCU fees can be seen below.

difference between credit union and bank fee comparison by secny fcu

*Average bank fee per service data from

The extra you'll pay in fees at a bank can quickly add up. The money you save from lower fees at SECNY Federal Credit Union can be used to give back to your community, such as donations to local animal shelters or your local YMCA or library. 

To keep more of your money.

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Difference Between Credit Union and Bank: Better Rates at Credit Unions

difference between credit union and bank interest rates by secny fcu near syracuse ny

Because credit unions act with the interest of their members in mind, rates on average are better for credit union members compared to bank customers. 

Generally, credit unions have higher rates on savings accounts and lower rates on loans and credit cards. 

Experience the Difference.

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A Credit Union Offers the Same Convenient Features You're Used To

difference between credit union and bank features by secny fcu near syracuse nyBecause credit unions tend to be local businesses, people assume they don't offer the convenient features they've become used to at a bank.  

SECNY Federal Credit Union offers all of the convenient electronic services you're used to, including:

How to Take Advantage of Credit Union Benefits

Membership at SECNY Federal Credit Union is not limited to specific groups or employers. At SECNY Federal Credit Union, we happily serve everyone in Central New York.

Any person working, living, worshiping or attending school, as well as businesses and legal entities in any of the following counties, are eligible for SECNY Federal Credit Union membership:

Do you work, live or go to school in any of the above counties? Then you are eligible to take advantage of our credit union member benefits!

We also offer all of the banking services you need in life, including, but not necessarily limited to:

Looking to get the most out of your money by opening an account? Need a loan? We can help.

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A credit union could be your best source for a mortgage

Financial institutions best budget m 2 ssd pulled back on mortgage lending since the housing bubble burst, but credit unions have increased their mortgage lending substantially. According to, credit unions originated 60 percent more first mortgages during the first nine months of 2012 compared to the first nine months of 2011.

While bank customers should shop around for a mortgage lender to ensure they get the lowest rates and fees, credit union members may want to check with their credit union first. Credit unions often offer lower interest rates and fees than other financial institutions, and typically work with members on an individualized basis.

Mary Waterman, lending director of the Montgomery County Employee Federal Credit Union in Germantown, Md., says credit unions can offer closing cost assistance to their members or a credit at the settlement table.

"The underlying philosophy of a credit union is people helping people," says Jeanette Mack, manager of corporate communications with Navy Federal Credit Union in Vienna, Va. "Our members are partners in our not-for-profit business and anything we credit union mortgage vs bank mortgage in the way of profits goes back into the credit union in the form of reduced interest rates."

Mortgage programs

"Credit unions offer every product that other financial institutions offer, including FHA and VA loans, fixed-rate conventional loans for 10, 15, 20 and 30 years and a variety of adjustable rate mortgages," says Scott Toler, president and CEO of the Credit Union Mortgage Association (CUMA) in Fairfax, Va., which supplies mortgage services to 60 credit unions. .

In addition, many credit unions offer their own loan programs to meet member needs.

"We offer our 'Homebuyer's Choice' mortgages with a zero down payment requirement, no private mortgage insurance and up to six percent in seller contributions for closing costs," says Mack. "We also offer refinancing on home loans up to $1 million with 97 percent loan-to-value."

Navy Federal pays up to $2,500 in closing costs for members and will match any loan approval at a lower interest rate. Toler says some credit unions offer a $500 rebate at settlement or even pay all closing costs for members.

"We offer the 'Harmony Loan' to members of credit unions we work with, which allows borrowers to reset their interest rate as often as every 120 days if mortgage rates decline," says Toler. "Instead of refinancing, borrowers can check rates online and reduce their interest rate with the click of a button. There's no loan approval or appraisal process and no closing costs."

Membership options

While credit unions were traditionally restricted to employees in certain industries or residents in a particular area, "credit unions are a lot easier to join than they used to be," says Toler. "For instance, the Fairfax County Federal Credit Union in Virginia used to be open only to county employees, but membership is now open to anyone who lives, works, worships or goes to school in the county. Some credit unions are more closed, but others are affiliated with an association and open to anyone who makes a small donation to the association."

You can find a credit union to join at the National Credit Union Association. Membership fees are very reasonable, usually ranging from just $5 to $20.

However, just as with banks, credit unions vary widely in their fees and services. The credit union you qualify to join may not necessarily be the one with the best mortgage products.

Customer service

"Credit unions are fiercely pro-customer," says Brian Martucci, a mortgage lender with in Washington, D.C. "However, a credit union with regional or centralized operations will be less likely to give their customers special attention than a direct lender."

Martucci says even if a credit union doesn't have centralized operations, new whole foods san francisco size of the credit union can impact its ability to provide individualized attention. "Big entities just don't work as well as small ones," he says.

Some Realtors say that a large credit union can be just as slow to respond to customer needs as a large bank.

Toler says that while credit unions use the same computer system to underwrite their mortgage as banks, credit unions keep about 25 percent of their loans in their portfolio rather than selling them to investors. Maintaining a substantial portfolio of loans allows credit unions to be more flexible with customers.

"In a credit union, we can use old-fashioned banking methods for our members," says Toler. "For example, if a 20-year member of the credit union is rejected by the desktop underwriting system because of a slightly low credit score, we can evaluate that loan personally and choose to keep it in our portfolio."

Individualized mortgage approvals, closing cost assistance and low lender fees are all reasons to consider becoming a member of a credit union. However, be sure to compare all your options between a bank, a direct mortgage lender and a credit union to see which works best for your needs.

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