You’ll want to pick an affordable mortgage loan and work with a lender that can meet your financial needs now and potentially in the future. That might be a bank or a credit union.
Whether you get your mortgage from a bank or a credit union, some of the basics will be the same.
For instance, you can likely find a range of mortgage types at both banks and credit unions. You’ll go through many of the same steps to get a mortgage, and you’ll make regular monthly payments once you have the loan.
The decision will come down to factors including the quality of your mortgage preapproval offers, existing banking relationships, and whether you qualify for any specialized loan programs, such as physician loans.
[See: Best Mortgage Lenders for First-Time Homebuyers]
Bank Mortgages vs. Credit Union Mortgages
A few general distinctions exist between bank and credit union mortgages.
Pros and Cons of Bank Mortgages
Even within the category of “bank mortgage,” there is variety. If you choose an online bank, you won’t have branch locations, for example. Still, some broad pros and cons exist.
[Read: Best Mortgage Lenders]
Pros and Cons of Credit Union Mortgages
Within the landscape of credit unions, you’ll find organizations with strict qualification requirements, such as a military affiliation, or organizations with broad accessibility.
Once you’ve identified a credit union that suits you, some broad pros and cons apply.
[See: Best Low- and No-Down-Payment Mortgages]
Which Type of Mortgage Is Right for You?
On the mortgage hunt, you should be looking for a loan you can afford and a lender that can offer you competitive pricing. Even if you already bank with a particular institution, you may find a better deal elsewhere.
“It’s a matter of who wants to be competitive,” says Dave Demming Sr., a certified financial planner and the founder and president of Demming Financial Services Corp.
If you work with a financial planning firm, you can check to see if it has connections with lenders that may help you get a better deal. Demming says he takes this approach with clients at his firm.
Connections or not, you should plan to secure multiple preapproval offers. That could include a credit union and multiple kinds of banks, such as online or regional options.
When comparing institutions, ask yourself what level of customer service you expect to need — and don’t be sold on membership benefits at the cost of a more expensive loan.
“Customer service is important, but if it’s costing me more money over the life of my loan, I may put up with a little bit lower of a customer service,” Slabach says.
You’ll also want to get your finances in shape to qualify for the least expensive loan possible.
“We can’t control ultimately what interest rates are; we can control getting at the lower end of that,” Demming says.
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Credit Union vs. Bank Mortgage: Which Lender Is Best for You? originally appeared on usnews.com
