Mortgages: Credit Unions vs. Banks
When purchasing a home, you can get a mortgage from a bank or a credit union. Check around for interest rates and other services when looking to take out a mortgage. The process is the same whether you go through a bank or a credit union, but credit unions focus more on the community.
“At Cal Coast, one of our strategic priorities is to empower underserved communities through financial inclusion. That is why we’ve expanded our outreach to support the City of San Diego’s Promise Zone with free financial literacy and wellness resources, a free Financial Wellness Center, and plans to open a brick-and-mortar branch in that area. This is part of our mission, and we believe giving back will have a lasting impact on our community,” said California Coast Credit Union President & CEO Todd Lane.
Banks are insured by the Federal Deposit Insurance Corporation (FDIC), and credit unions are insured by the National Credit Union Administration (NCUA). Both are federal insurers, so your money is safe in either type of institution. You can check if a credit union is federally insured under NCUA: https://mapping.ncua.gov/
Banks and Credit Unions
- Credit unions are not-for-profit organizations owned and controlled by their members, so they can offer lower interest rates on mortgages. Banks operate for profit, so the rates may be higher.
- Credit unions require membership based on varying criteria.
- Credit unions usually offer lower process and origination fees, application fees, closing costs on mortgages, or interest rates. It may be easier to be approved for a loan at a credit union, especially if you have a lower credit score.
- Service at credit unions tends to be more personalized or community oriented.
- Banks have more branches and more ATM machines, including outside the county, although many credit unions are part of ATM networks.
- Many credit unions have no wire or phone service on the weekend or holidays.
- Banks often offer more types of mortgage programs.
- Credit unions cannot do international wire transfers. They must go through another company or through a bank.