Credit unions filling the mortgage void LOS ANGELES – Nov. 21, 2014 – The number of mortgage originations issued from credit unions in the first half of 2014 climbed 10 percent year-over-year, and credit union loans are now 8 percent of the home loan market. That makes credit unions a growing option for homebuyers seeking financing, according to data from the Credit Union National Association (CUNA). Nearly two-thirds of credit unions offer mortgages. Weve seen a very strong increase in originations over the course of the last several years, says Mike Schenk, vice president of economics and research at CUNA. In June, the nations 6,557 credit unions surpassed 100 million members. A buyer must be a credit union member, but its an option for many people since credit unions tend to be tied with many employment, trade, religious groups or specific communities. Mortgages comprise about 41 percent of all credit union loans, compared to 25 percent in 2000. The average credit union loan amount is $130,000, and 70 percent of the loans are for 30-year fixed-rate mortgages, though many credit unions also offer different financing options for members. Pentagon Federal with 1.3 million members nationwide, for example, introduced a 15/15 adjustable mortgage, where rates reset only once at the midterm mark to reflect the current market rate. Also, the National Institutes of Health Federal CU offers a five-year fixed-rate mortgage, dubbed the see ya loan, that allows homeowners to refinance and coordinate it to a time of a special event, such as retirement or when the children go to college, in order to end their mortgage payments by that time. Credit unions dont typically charge cheaper interest rates, but they tend not to tack on a bunch of superfluous fees that other lenders seem to love, the Los Angeles Times notes in a recent article. And because they are local and member-controlled, they are more likely to consider applicants with a story to tell, than some underwriter five states over who is forced to stick to standard guidelines. Source: Shopping for a Loan? Credit Unions Can be Consumer-Friendly Option, Los Angeles Times (Nov. 9, 2014) © Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688
Posted on: Sat, 22 Nov 2014 21:35:53 +0000
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