There are often many benefits borrowers can take advantage of when they finance a mortgage through the same place where they bank. This is especially true if one of your banking establishments is a credit union.
If you’re not already banking through a credit union or don’t understand what makes credit unions any different from banks, read on to learn more and figure out which credit union would make the best mortgage lender for you.
What are Credit Unions, Anyway?
Credit unions are not-for-profit, member-owned financial institutions which exist with one primary goal in mind: to serve its members. Just about anyone is eligible for some form of credit union membership, whether through work or the region they live in.
Many people rave about credit union mortgage rates, but there are other benefits to financing your loan through a credit union.
First of all, if you’re already a member, you might be eligible for other discounts or bonuses, depending on your credit union’s mortgage programs.
Secondly, credit unions do a great job of educating their members about their finances and financial offerings, which will allow you to make a confident and well-informed decision about your mortgage.
Third, credit unions have local branches where you can stop by and chat with a loan representative about any questions you might have. Most credit unions excel at customer service, whether in branch or on the phone.
The Best Credit Unions for Mortgages
1. Connexus Credit Union
This credit union is one of the best ones for first-time home buyers to consider. They offer low down payment options and even consider alternative credit, which is great for borrowers with no or poor credit history.
The typical down payment requirement is 3%, while the average credit scores are 600 and above. Connexus also offers a large range of mortgage products, from fixed to adjustable rate, and services all states except Alaska and Hawaii.
2. Alliant Credit Union
First-time home buyers looking to avoid paying for mortgage insurance can turn to Alliant Credit Union. This credit union offers low- to no-down-payment options and has no minimum required credit score for mortgage approval.
Many first-time home buyers qualify for no down payments and no mortgage insurance while existing homeowners can qualify for a down payment as low as 5%. Most applications must be done over the phone or online and service is offered in all 50 states. Even though Alliant is the eighth largest credit union in the country, membership is still limited.
3. Navy Federal Credit Union
Anyone looking for a VA loan should start with Navy Federal Credit Union. This credit union is available for members of the military service, with a strong focus on first-time home buyers. Their VA loans require no down payment and they even offer a $1,000 mortgage rate match program.
Navy Federal has a wide selection of mortgage products available to credit union members and operates in all 50 states. On the downside, borrowers should expect longer than normal closing times on their home.
4. PenFed Credit Union
Military or government affiliates can apply to become members of PenFed. This credit union is a great choice for anyone looking for home equity financing, offering three different home equity line of credit products. Down payment requirements are as low as 3% and the average minimum credit score is 620.
PenFed also has some of the lowest, most competitive mortgage rates of all credit unions, and they offer a variety of products to help not only first-time home buyers but also existing homeowners.
Another option for military members and their family is USAA. Primarily known as an insurance company, USAA offers a variety of VA loans and mortgage packages. They offer excellent assistance to first-time home buyers and provide online pre-qualification. Applicants should expect to pay a 3% down payment and have a credit score of at least 620.
Unlike other credit unions, alternate credit is not accepted through USAA, so applicants will need to have a good credit score to apply. They also have lower fees than most traditional mortgages.
In addition to the above national credit unions, it’s also a good idea to reach out to your local credit union to find out more about their loan programs and benefits.
For more help with your financing questions and options, reach out to a qualified real estate agent. Clever can help connect you with a local Clever Partner agent who can guide you through the home buying process.