Updated: Jun 30
"Tired of the big banks, maybe you should try a credit union. They are razer focused on providing great customer service and you could be able to negotiate a better mortgage rate with them."
By: Allan R. Kirby
Community-Based Credit Unions vs the Big Banks
I have mentioned on many occasions through other articles how I have always had a banking relationship with at least one credit union. The reasons why I continue to bank with smaller community banks such as credit unions are simple, they are so much better when it comes to personalized financial services, low fees, and great loan rates such as mortgages. In fact, there is a lot to like with a smaller financial institution such as:
Better rates on savings accounts and certificates of deposits.
Competitive mortgage rates.
Fees tend to be lower at Credit Unions.
Local deposits are used to make loans to local businesses.
Credit Unions tend to have a better understanding of the communities they serve.
Credit Unions tend to have a more personalized customer service experience and have higher customer satisfaction rates.
Credit Unions provide local jobs and support local charities.
Finally, I have always found it can be easier to get a loan with a credit union rather than a major bank, which tends to be less flexible with its products and services. Credit Unions for example pride themselves on providing a higher level of personalized service to keep their customers coming back. As a result, I have found they do take the extra time to ensure customers can get a loan such as a mortgage at a lower rate, which is one of the reasons why I find it easier to get a loan with a credit union.
"Is this your first time buying? It never hurts to visit a local credit union to see if you can get a better negotiated rate for your mortgage."
You can negotiate rates
What I love most with credit unions is the flexibility they have at reducing their posted rates as well as adding other services at a much lower cost. More recently I did a car loan comparison between a major regional bank and a small credit union and even though I did receive a reduction in my rate with the larger bank, I still ended up with a lower rate with the credit union by around .25%. I was also offered a 6 months .25% teaser rate for my deposit account in addition to the regular rate of.15% with the credit union. Overall not bad and although not significant I nevertheless was still offered more favorable terms as well as rates by the credit union.
"I found my local credit union provide better flexible mortgage options and better rates vs what a major bank was offering. "
I liked the fact that I could discuss rates and other services with the staff at the credit union which allowed me to receive a great banking package. The credit union was more than willing to develop a great financial service plan, surprisingly I never received such personalized services with the larger regional bank, nor the national bank I have used in the past.
#1 Superior customer service
If there is one thing that stands out with a local community credit union is the high number of positive reviews they get due to superior customer service. It's the cornerstones for all community banking such as credit unions; the ability to provide excellent services to their clients. Credit Unions have never let me down and the staff has always helped me when I have had issues. This cannot be said for many of the larger financial institutions I have dealt with over the years. I am still not sure if it's not just bad luck but I have had so many bad experiences when dealing with the big banks. The number one problem with the big banks, poor customer service.
Top 10 Micro/Small Credit Unions in the USA.
When looking for the best mortgage terms you can get, you need to do a little searching on the internet to find a local credit union. Some credit unions are rather small with only one or two branches. However do not let the small branch size fool you, these credit unions tend to provide a full array of financial services that will meet most of your needs.
I have highlighted some of the best small credit unions in the USA. These credit unions like many others around the country provide great customer service and are highly rated by us and by many customers using their services. Take a look and see if any of these credit unions are in your area.
"Superior service and support to customers will continue to be the foundations of community banks and credit unions."
Don't be shy talk to a local bank today
I encourage you to go to a local credit union or community bank and see if you can negotiate a better rate than what you will receive at a major bank. As I have mentioned throughout this article, it can be easier to get a loan with a credit union but you do need to visit in person or call to see what your options are. I have found credit unions are better for mortgages because they tend to have lower mortgage rates and fees. Additionally, the approval process for a loan at a credit union tends to be much faster, this is because the process normally happens right at the branch so you do get a quick response without having to wait for someone to get back to you.
Are We In A Housing Bubble?
This is a tough question and I am not an expert however the housing market is insane and we have seen high demand and significant price appreciation, all of which do concern me. There are likely going to be small corrections but the post covid era is upon and many people have moved out of the cities to the suburbs which has put significant price pressures on housing. Add significant underbuilding over the last decade and younger generations finally looking to get into the housing market, I do not see the markets abating anytime soon.
Although you may not have control over the prices of homes, where you do have some control is through negotiating great mortgage rates and possibly some help with closings costs, which is why you should try a local community-based credit union to see what you can get. Even small incremental savings can add up significantly over the life of the mortgage, so it never hurts to find out.
I firmly believe smaller financial institutions such as credit unions will continue to play a critical role in our communities and will be around for a long time to come. But do not take it from just me, take the time and read reviews such sites such as Yelp and Google on local community credit unions, I think you will find a high number of positive reviews and will be hard-pressed to find any serious issues. So go visit one today, talk to the staff and see for yourself why you should get a mortgage at a local credit union.
This is a MySmallBank.com blog written by Allan Kirby, who writes and produces Personal Finance articles and videos.
Disclosure: mysmallbank.com nor the author received any compensation from any credit union or community-based bank for this article. The article is our opinion only and is written to help readers learn more about local credit unions and why you could get a better mortgage rate at a credit union. Younger generations may also find credit unions provide more flexible mortgage options. #mortgage #realestate #househunting #money #rates #firsttimehomebuyer #finance #creditunion #creditunions #housingbubble #genz