Everyone remembers Jimmy Stewart as George Bailey in “It’s a Wonderful Life”, helping people to realize their dreams of home ownership. One reason why the film has become a classic is that everyone recognizes the central themes and identifies with the dream of buying a home. Most home buyers, and especially younger ones, need to finance their homes. Banks are one source of a home mortgage, but in recent years, credit union banking services have started offering home loans. There are many advantages to choosing credit union home financing.
What is a credit union?
Credit unions have been around since 1852, but first appeared in the U.S. in 1908. They are financial co-operatives that provide financial and credit service to their members. They offer most of the same services as banks, but differ from them in some important ways. As non-profit, member-owned institutions, they are required by law to act in the best interests of their customers, who are also members. By contrast, banks prioritize their shareholders’ interests.
Membership in credit unions is generally open to those living and working in the area. Nowadays credit union banking services include credit lines and home mortgages. In recent years, credit unions have expanded home mortgage services for their members. For home buyers who need financing, mortgages from credit unions have some advantages over getting one from a bank.
Financing your home
Buying a home is the biggest investment most people will make throughout their lives. Most people don’t have the cash saved up to pay for the home upfront, but need to secure financing. Younger home buyers, especially, rely on home financing. Among home buyers in the 36 and younger age group, nearly all or 98% financed their homes, according to the 2017 NAR Home Buyer and Seller Generational Trends report. Among older home buyers, in the age group 62 to 70 years, 68% sought financing.
People seeking home loans have turned to banks. In recent years, credit unions have started offering home loans. These are attractive for a number of reason, including lower interest rates than banks. Credit union banking services are more personalized , since borrowers are also members. Unlike banks, credit unions are more willing to offer loans to people with low or bad credit scores.
Credit union banking services have expanded to include credit cards and home and auto loans. They have many advantages over home loans offered by banks, including lower rates. Credit unions are also more willing to approve mortgages for first-time home buyers and for people with low or bad credit scores.