The majority of the time, when you apply for a mortgage through your credit union, whether you are refinancing or buying a home, you may not be happy to find out that it is not your credit union who will actually be handling your mortgage. It does depend on the credit union you are dealing with, but having a credit union who actually services the loan is very rare.
While local consumers expect that their mortgage will be serviced by their credit union, they will soon find out that the loan is actually “farmed out” to a mortgage lender that is not part of the credit union, but only services mortgages for them. In rare cases where a credit union will handle their own mortgages, to qualify will likely be very difficult. You will most likely need perfect credit and a substantial down payment. The risk involved in high balance loans is why these credit unions use secondary lenders. This way, they can still seem like they are providing a service to you, but they don’t have to worry about taking the loss should the loan go into default.
Consumers looking for a VA or FHA loan will rarely find these mortgages available though their credit union. Freddia and Fannie Mae conventional mortgages will likely be an option, but again, depending on the credit union you belong to, these mortgages are not likely to be serviced directly by your credit union. The loan will actually come from a wholesale lender who is merely passing on their products and rates to the credit union. Payments will also be made to the wholesale lender and not directly to the credit union, which is not what most people taking out these loans expect, and in turn are not pleased by this fact when they find out what is actually going on.
While going through the mortgage approval process, consumers should be made aware that they are actually dealing with a representative of the mortgage lender, and not necessarily one from their credit union. This is to protect the credit union from the liability of customer complaints and other responsibilities related to the loan, but is not always disclosed to the customer.
This is a far cry from the image of the credit union portrayed in the movie “It’s A Wonderful Life”. While the kindly George Bailey may have provided a a sincere, dedicated service to his mortgage customers, these days this is more of a fantasy than a reality. In the real world it is more like George partnering with Mr. Potter and feeding his clients to him so he can devilishly take advantage of these good people during the home financing process and have them paying unexpected overcharges for his services. While you may be lucky enough to have a credit union that services their own mortgages, the chances of that are slim.
Since your credit union could be making millions of dollars from the mortgages they are farming out to secondary lenders, it becomes probable that they will likely not care how the customer is treated after they are no longer their loan customer. This is something you may want to keep in mind if you are considering using your credit union to secure a mortgage.
Rob K. Blake, refinance expert and author, educates mortgage shoppers on finding local providers by state like New Hampshire Mortgage Brokers and Lenders and provides reviews of national companies like Accredited Home Lenders. Article Source:http://www.articlesbase.com/mortgage-articles/credit-unions-and-mortgages-what-you-dont-know-1772937.html
