Both credit unions and banks offer financial solutions to consumers, including mortgage and home loans. There are many options you can consider when you are looking for mortgage loans. While making a choice between them, only interest rates and terms of the loan are not a criterion; you should also consider the personal level of communication you have with the institution to review your loan option. When it comes to mortgage loans, credit unions and banks turn to be a significant option for many. You need to know what it means to Credit union mortgage vs bank mortgage to make an informed decision.
Key difference
Most of them feel that there is no difference in lending money from credit unions and banks. Of course, they make no difference in adhering mortgage lending regulations and other aspects related to the privacy policy, but, credit unions are a non-profit organization with a group of the community mostly customer. Banks are profit organizations that report to their shareholders. Credit unions are more interested in developing personal relationships with the customers and aim to rein the customers in their community.
Credit unions work for specific demography
Not everybody willing to take a mortgage loan can apply for the loan at the credit union. You should be a member of a community or specific collective group to get the loan from credit unions. It serves the people of specific demography to offer the loan. It works with the people of specific demography that are locally centred. On the other hand, banks allow anybody to apply for the mortgage provided you have necessary supporting documents and are stand comfortable to repay the loan. Irrespective of the institution you choose to apply for the loan, they help you roll through the entire loan application process from the start to end.
Loan rates
This is the most important factor you should look at while understanding Credit union mortgage vs bank mortgage. In the credit unions, the profits that are earned in the form of the interest rates and other fee are transferred to the community. According to Social Fish, To benefit the consumers and the community as well, they offer the most competitive interest rates. On the other hand, banks have many processes to move loans. It is how they make money. The volumes of banks are high when compared to credit unions, so, they are capable of offering extremely competitive rates for few long term loans.
Customer service
As it is said earlier, customer service is also one of the key aspects to consider while making a choice between credit union and bank mortgage loans. Credit unions step ahead in providing customer service when compared to banks. Credit unions are more emphasized at a local and personal engagement, whereas banks have less priority on customer engagement due to high demand. Personal engagement is less priority when you reach the banks.
Physical locations
Any loans need to the borrowers to make multiple visits to the lending institutes to avail the loan. credit unions have less physical locations when compared to banks. The borrowers that are looking for financial assistance will have easy accesses to the lending institutions and get any assistance needed to get the loan processed in a quick note. Banks are a good choice when you need to visit a physical location to get the loan processed.
Technology
Banks have accesses to the technology so, they can easily update and quicken the process and approve the loan. Credit unions, on the other hand, are not updated in the use of technology. This may cause a delay in the process or any updates related to the loan account.
Conclusion
Before concluding between bank mortgage and credit union mortgage, you should check in what matters the most for you and what facilities you are looking for during the loan process. Narrow your choices based on your criterion. List down your preferences and also consider your future benefits while you consider options. You should also list down the negatives and balance between two before making a conclusion.