NEW YORK–With mortgage rates declining in recent weeks and perhaps hitting the magic 6% threshold that would likely give the real estate market a new jolt, one national publication has offered a comparison of mortgages at banks and credit unions as a primer for those who may soon be in the market.
As the CU Daily has been reporting, rates are currently at an 11-month low, and many would-be borrowers may start looking for financing—and they will likely have a question, a new report states.
“Whether you’re thinking about locking in a rate now or waiting to see if the market continues to improve, one question may be on your mind: Is it better to open a mortgage through a credit union or a bank?” reported Fortune. “Either can be a viable option depending on your priorities.”
The ‘Key Differences’
After explaining some of the differences between credit unions and banks, Fortune told readers there are “key differences” consumers should be aware of, including, “most notably, credit unions are not-for-profit—while banks are absolutely for-profit. This can have many noticeable influences” on fees and interest rates, but also mean membership requirements.
“All to say, credit unions can effectively be thought of like member-run, not-for-profit banks that emphasize community, transparency, and low fees,” Fortune stated. “So, why doesn’t everyone stick to credit unions for a mortgage? Well, larger banks may offer benefits such as a more modern digital banking experience and a larger geographical footprint.”
CUs Criticized for Tech
The publication then offered some comparisons, including the basic similarities between the two lenders, saying credit unions are known for offering more personable service, while national banks “typically have far better website and app functionality. Credit unions are often more bare bones and can sometimes feel slow, limited, and perhaps out of date with features consumers have come to expect.”
The report said banks are also more likely to offer many more branches.
Another negative for credit unions, according to Fortune, is that “many have restrictive criteria and you must qualify based on a certain geographic area or by working in a certain industry…”
