Question Details

Buying1sthome, Home Buyer in Manassas, VA

Getting a loan from a bank or credit union?

Asked by Buying1sthome, Manassas, VA Thu Jan 24, 2008

What are the upsides or downsides for each lender?

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3
Shop both and compare ALL terms side by side. If any of the terms change at the last minute....DO NOT SIGN. Credit unions, by nature, typically offer very good terms. Being that a credit union is owned by it's members, the likelihood of being on the wrong end of a bad loan is almost nil. Dealing directly with a major FDIC insured bank will render the same result.
1 vote Thank Flag Link Thu Jan 24, 2008
Hello,
As far as your question is concerned... using either a bank, credit union, or even mortgage broker can yield the same results. The reason is that, for the most part, all of these loans wind up in the same place... these institutions roll up a bunch of these loans that they make and sell them on Wallstreet (which is why many times you get a loan from one place... then the loan is "sold" to another institution that takes over responsibility of sending you your monthly bill). This means that investors wanting to purchase these loans for the most part will require the same qualifications for borrowers.
As far as rates are concerned... again... rates can move daily, and won't stop until you lock your rate in. I normally advise clients to talk to people they know to see if they can recommend a good lender. (Someone that they have worked with before)
If you cannot get a solid referral for a lender, then talk to the bank and the credit union. For someone to say that one has lower rates or easier qualifications is just unknown. It truly differs from institution to institution.
Good luck and have a great weekend!
If this has bene helpful, I would appreciate some feedback.
Best Regards,
Alex Amaro
Web Reference: http://www.alexamaro.com
1 vote Thank Flag Link Thu Jan 24, 2008
I believe the differences really lie in what they do with your loan. Some banks sell your loans, some keep them in house. Banks and credit unions tend to invest in different things as well.
But as far as you are concerned (the borrower) I think the real difference is essentially the cost of lending, and I don't believe there is an upside or downside as a hard and fast rule between the two types of institutions.
So I would simply compare rates and closing costs of each lender you go to and figure out which one offers you the best deal and run with that.
The only other thing I would say is this: Sometimes it is good to develop a relationship with a bank, especially if they DO hold your loan in-house (don't sell it to someone else), keep your accounts there, etc. In the future it may be easier to obtain loans through them.

Brendan Murphy
Broker, CRS, GRI, ePro
Raving Real Estate
Laramie, WY 82070
1 vote Thank Flag Link Thu Jan 24, 2008
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