Banks vs. Credit Unions: Who Should You Choose for Your Home Loan?

When it comes to applying for a home loan, choosing your lender is one of the most important decisions you’ll make. The lender you choose can make the difference between finding the right mortgage option for you or not, having a smooth or stressful experience, and getting to closing ASAP vs. having a process that drags on. In this article, we’ll discuss the pros and cons of choosing between two types of lenders, banks and credit unions. Of course, as a community bank ourselves, we firmly believe we can offer you the best mortgage experience in Central Illinois and the Metro East. Keep reading to learn more about the differences between banks and credit unions!

Dedicated Mortgage Team

You’re more likely to find a dedicated mortgage division at a bank than a credit union. This is one of the key differences between the two types of financial institutions. For example, Town and Country Bank and Peoples Prosperity Bank has its own mortgage lending division, Town and Country Banc Mortgage Services, Inc., with 12 experienced mortgage lenders on staff. That’s why we are consistently rated the top housing lender throughout Central Illinois and the Metro East. We also close most home purchase mortgages in 30 days or less. As a top lender with 12 branch locations, our mortgage lenders directly serve the communities and surrounding areas in which they work but are able to originate and service loans in multiple states. Credit unions usually have fewer locations overall than banks, so fewer physical branches where you can meet with a lender to review your options, complete paperwork, etc.

Loan Availability

Many credit unions do not offer as many standard conventional loan options or lower down payment options as banks, so you may not be able to find the best home loan that fits your needs. On the other hand, Town and Country Bank and Peoples Prosperity Bank specifically offers a variety of low down payment options, including FHA loans, Rural Development, VA loans, and down payment assistance programs like IHDA. The advantage to our customers is that they have more options available to meet their housing needs.  Browse our standard down payment options and low down payment home loans. We also offer a variety of terms.

Personalized Customer Service

Excellent customer service is usually one of the big selling points of a credit union. However, the argument that you can find better service from a credit union only holds up if you’re comparing them to the megabanks. At the community banking level, a bank like Town and Country Bank and Peoples Prosperity Bank can provide the same level of personalized customer service and a hassle-free mortgage application process because we are owned and operated locally with all loan decisions made right here in Illinois. Our lenders are part of your community and available by phone, email, or face-to-face when you need them. 

Quick Turnaround on Loans

As mentioned above, both credit unions and community banks can usually offer a faster turnaround time on loan decisions than national banks and lenders. At Town and Country Banc Mortgage Services, for example, we close most home purchase mortgages in 30 days or less. And if you can find a similar turnaround time at your local credit union or community bank, you may only be able to find the loan program you’re looking for at your local bank, such as the Professionals Program, which we offer to certain buyers with a large student debt balance.

Membership Requirements

Think you’ve found the perfect mortgage loan officer at your local credit union? Wait—are you a member already? If not, do you even meet the membership eligibility requirements? Unlike credit unions, community banks don’t have any prerequisites to applying for a mortgage loan. Whether or not you have other types of accounts with us already, you’re welcome to apply for a home loan.

Technology

Banks are more likely to offer the latest technology, such as mobile banking and online applications, than credit unions, which are usually slower to adopt technology. For example, you can apply online for a mortgage from Town and Country Bank and Peoples Prosperity Bank. And once you have an active loan with us, you can easily make payments online if you want to.

What to Ask Your Mortgage Lender

When deciding between a bank or credit union for your mortgage, here’s what to ask:

• What fees do you charge and how much are they?
• How many branches or locations do you have?
• Can I apply online? Pay my bill online?
• Do you offer government-insured loans, like FHA, VA, and Rural Development?
• Do you participate in any special programs for first-time homebuyers?
• How much can I get pre-qualified to borrow?
• ...and any other questions you have about your specific situation!

Contact our mortgage lenders today!

Ready to learn more about your home loan options at Town and Country Bank and Peoples Prosperity Bank? Whether you already have an account with us or are a new customer, our lenders are here to help and support you throughout the mortgage application process. Browse our home loan options or contact us today!