Mortgage or home loans are not exclusive to banks. There are other institutions that offer financing so you can own your dream home. One of the most notable mortgage sources that is increasingly becoming popular among Americans are credit unions.
What are credit unions?
Credit unions are non-profit financial cooperatives where members are given the exclusive privileges of saving, borrowing, and receiving affordable financial services. In simple terms, they exist to help their primary customers – their own members.
Credit unions differ from traditional lending institutions in many aspects. They usually offer lower interest rates compared to traditional banks, are more lenient in their requirements, and members have a say as to the decisions that run the dynamics of the cooperative. Service is also more personalized in credit unions because of the size of the institution. Despite these differences, you can still find similar services in credit unions as you do in conventional lenders.
Finding a Credit Union
If you are planning to partner with a credit union when you refinance, however, you might need to do the extra mile to find one that offers mortgages. The National Credit Union Administration offers an online toolthat helps you find the closest credit union near you. You can also make use of the handy search tool at My Credit Union.
To use these tools, simply fill in the fields with the required information and click the submit or return button. Use the filters accordingly to further specify your search.
Am I allowed to transfer to a credit union?
Yes, you are. There is no limiting legislation that prohibits a borrower to refinance with a different lender.
Finding Your Rates
Interest ratesare still relatively low compared to last year’s but current speculations of a hike due to the recent political waves are also ripe. If you are going to refinance, better lock in soon.
Once you have found the nearest credit unions within your area, inquire for rates and associated refinancing fees. Typically, refinancing costs around 3 to 6 percent of your outstanding home loan balance. Decide on whether you’re going to pay for the closing costs upfront or wrap it on the loan in exchange for a higher interest rate.
How to Refinance with a Credit Union
- a) It is imperative that you become a member of the credit union you choose.
- b) Once you are a member, fill up necessary forms to apply for refinancing.
- c) Submit necessary documents which commonly includes the following:
– Pay stubs from the past two to three months
– Tax Returns and W-2’s and/or 1099’s
– Statements of outstanding debt
– Statement of assets
– Credit report
- d) Lock in on a rate.
- e) Order your loan documents.
- f) Sign and close.
These are similar refinancing steps that you would take even when you refinance with your bank.
Credit unions are gaining traction in attracting the attention of many Americans towards personalized lending. If you want to experience financing outside your traditional loan institutions, credit unions are the wiser alternatives.