Credit unions might be the sleeper of mortgage providers currently out there.

A credit union is an institution that functions as a bank, but on a smaller and more concentrated level. Credit Unions are regulated and their guidelines dictated by the National Credit Union Administration (NCUA), not any federal agency. Depending on the size, they may offer any financial service from basic Christmas club accounts to high end construction loans. It pays to enquire……

The types of mortgages, lending limits and loans to deposit ratios are strictly regulated by NCUA. This is why credit unions limit the products they offer, their loan amount limits and property types. For example, a credit union might only be able to do single family owner occupied homes or only offer a 15 year fixed. Many credit unions are not allowed to do coops, loans over 80% LTV or even second homes. NCUA will allow a product mix based on the strength, asset base and lending history of the credit union. The overall product menu is based on liability, capability and asset management. So you see a credit union might be stronger than a bank even though the use of their mortgage portfolio is limited.

I am a firm believer in credit unions because their mortgage interest rates are very competitive, the fees are lower and the guidelines might be more lenient for their members than a large commercial bank would be for a depositor. For those of you that care, many credit unions keep their mortgages and service them, so your loan is never sold as a bank would.

A credit union has members (depositors) who must fit parameters   as outlined in its charter.  There are credit unions for specific religions, gender-specific and hobbies. In other words, it is a closed club. I can find a credit union that anybody can join by simply researching the national list (http://www.ncua.gov). There are credit unions for most large corporations, unions, universities, states, municipalities, and anything else you can think of. So, if you belong to a credit union and are in need of a mortgage, you might want to give them a call. If you don’t belong to one, you might want to seek one out as your mortgage lender of choice.