Credit Union for Mortgage

Becoming a homeowner occupies a prime position on the wish list of many Americans, and taking out a mortgage loan is usually the preferred way to finance the purchase. But sometimes, your circumstances change, and you may want to consider refinancing the mortgage to enjoy better lending terms.

Mortgage refinance involves replacing your old mortgage with a new one. Usually, the first thing that comes to mind when you think of mortgage refinance is a bank. While traditional lenders are an option, approaching a credit union for a mortgage refinance may be the better move for many borrowers.

Why so? Here are five reasons why you should consider a credit union if you are thinking about a mortgage refinance:

1. You Enjoy Lower Interest Rates

Credit union refinance rates are often lower than those at traditional lending institutions since credit unions are not in business to make a profit. As not-for-profit financial institutions, they only need to cover their operating costs. This means they can pass on the money saved to members in the form of lower interest rates. As a result, you can save thousands of dollars’ worth of interest over the life of your home loan when you refinance with a credit union.

Banks also charge higher fees for processing refinancing applications than credit unions, as they need to generate profits for their shareholders. Coupled with a higher interest rate, it can make refinancing expensive. In contrast, refinancing fees charged by credit unions are much lower, making refinancing the mortgage affordable for most borrowers.

2. You Don’t Need a Perfect Credit Score

Lenders use credit scores to evaluate the creditworthiness of a borrower. The higher your credit score, the better your chances of getting a refinance loan on favorable terms. On average, most lenders require a credit score of 620 or above to extend a conventional mortgage refinance.

However, credit unions are more flexible about the eligibility criteria of borrowers. Even borrowers with a bad credit history or low credit scores can get approved and enjoy credit union refinance rates.

A credit union can also take a more personal interest in your situation. For instance, they are more likely to advise you about the way forward if you are found ineligible for a mortgage refinance loan.

3. Refinanced Loan Remains With the Credit Union for Life

Banks operate on a for-profit model. If they find a company that is willing to purchase your mortgage, they sell it off for a profit as soon as the mortgage closes.

But that’s not generally the case with a credit union. Most credit unions hold the mortgage refinance until it’s paid off. As the servicing remains with the same institution that offered you the refinance, its team will be familiar with you and you with them. You can reach out directly when you have questions, instead of speaking with a call center.

Moreover, since the credit union holds the mortgage refinance loan in its portfolio for the life of the loan, you are unlikely to experience escrow or payment issues, which can happen when your lender changes. This streamlined approach makes managing your mortgage easier.

4. The Quality of Service Is Unparalleled

Credit unions keep a close eye on the market and stay abreast of the latest developments. Moreover, as a local organization, they understand the local housing market. As a borrower, this means you may get a mortgage refinance loan approved for a unique property you own that traditional lenders may not agree to refinance.

Additionally, since credit unions are designed to serve the needs of their community members, they are more committed to understanding the needs of their members. They make a genuine effort to provide borrowers with the best offer to improve their financial positions. Opting for a credit union means receiving more hands-on and personalized customer service.

For instance, you can consult with the home loan experts at the credit union to discuss whether refinancing your mortgage is more beneficial for your situation, compared to taking out a home equity loan. You can also check whether you are better off with a traditional refinance or if a cash-out refinance might serve you well.

Some credit unions also offer additional services and products on a complimentary basis to their members. Banking giants can’t match the personal attention provided by credit unions.

5. A Variety of Mortgage Refinance Options Are Available at Credit Unions

When it comes to mortgage refinance, there is never a one-size-fits-all solution. Some borrowers refinance for better terms, others for lower interest rates. Some homeowners are looking for both. Maybe you are refinancing to access your home equity.

Credit unions bring a variety of mortgage refinance options to the table, and you are likely to find one that matches your needs. For instance, at Solarity Credit Union, you can choose between express refinance, traditional refinance, and cash-out refinance, depending on your needs. Some credit unions will work with you to come up with a mortgage refinance option tailored to your needs, as they have the freedom to play around with the size and repayment frequency.

What makes credit unions even more attractive is the quick approval process. You don’t have to jump through too many hoops to access money. Typically, credit unions inform borrowers about the sanction status within a few days of receiving the application. You can complete the application online from anywhere in the world, and the signing and closing process is straightforward. A simpler application and approval process makes it convenient for you to refinance the mortgage in a hassle-free manner.

Before you start off the refinancing process, don’t forget to weigh your options. Lower interest rates, flexible lending terms, and a variety of mortgage refinancing options to choose from make credit unions a worthy contender. Whether you are a first-time buyer or a seasoned buyer looking for a mortgage refinance, consider reaching out to a credit union such as Solarity to see what they offer.

By Punit