Buying a home is an exciting time. As you start to comb through listings and decide you’re ready to take the plunge to purchase, you’ll want to pursue getting pre-approved for a mortgage. This way, you'll know how much you're approved for and can shop for homes within your price range. Additionally, having a pre-approval boosts your chances of having your offer accepted once you’ve found a house you want to buy. If you aren't already pre-approved, this delays your ability to put in a bid, which means someone else may be the one moving into your dream home.
To get yourself qualified for a mortgage, it’s a good idea to shop around for rates. Many people find they do best with a credit union, however, there are some drawbacks you might want to consider before making your decision of the type of lender you want to work with.
Credit Unions Require a Membership
Unlike traditional banks, credit unions aren’t open to everyone to use. To apply for a mortgage through a credit union, you’ll have to join as a member. The drawback is not just anyone can join. To qualify for membership, you’ll have to be affiliated with a specified organization or meet other designated criteria set by the credit union’s guidelines.
Many people find they are successfully able to locate a credit union they are eligible to join, but it’s not a given. To check to see if you meet the criteria for membership to a credit union near you, check MyCreditunion.gov.
Fewer Branch Networks
Credit unions are community-based non-credit entities. As a result, most of them are geographically concentrated and operate with fewer branches than traditional banks. This means your options may be extremely limited if you want in-person service.
Having a physical branch to visit when you want to resolve problems is a convenience many people often want when working with a financial institution. Consider how important this access to your lender would be to you. If you’re comfortable with strictly phone contact or online options (which might also be limited, depending on the size of the credit union), in-person access may not be an issue for you.
Limited Financing Options
Larger commercial banks typically have a broad range of financing options. While you might find a good rate at a credit union, you’ll typically find far fewer product offerings than you would at a larger bank.
Depending on your individual credit and financial standing, a credit union may not be able to offer you the best interest rates on a mortgage. Additionally, since they are smaller entities, they don’t always have nearly as much cash on hand as traditional banks, which means they might be limited in the number of mortgages they can approve at a given time.
When shopping for lenders to pre-approve you for a mortgage, you have many options between traditional banks, credit unions, mortgage banks and mortgage brokers. If you diligently do your homework, it’ll empower you to find a lender that can meet your financing needs.
About the Author
Ryan Mandigo
Ryan Mandigo is an award-winning professional broker associate with Omni Real Estate. Originally a native of New Hampshire, his love of real estate began 30+ years ago while swinging a hammer on a framing crew. He has always had a strong passion for helping people, whether it be assisting a couple in purchasing their first home, finding a home that fits a growing family's needs, or downsizing for those with an empty nest. He strives to build strong personal and professional relationships with being a true believer in the power of positive thinking and always willing to lend a helping hand.
He is also a co-founder and board member of the Swing Fore the Kids organization. A local charity that is 100% nonprofit and their sole purpose is to help needy children and young adults within Horry County communities. He finds great satisfaction and pleasure in seeing how working hard for a great cause and raising funds can help others in need. He is also on the Board of Directors for the Waccamaw Youth Center in Conway, where their mission is to provide at-risk youth "A Place To Call Home"
When he is not working, he enjoys music, working around the home, spending time with family and friends, turning wrenches on vintage vehicles, getting some wind therapy on the Harley or chilling with their dogs.
Some quotes he lives by - "Do what you like and like what you do" - "You have to be odd to be number one" - "Dreams don't work unless you do" And one of his favorites. "Positive and enthusiastic thinking in all you do"
