The US Government has not made life easier on anyone with their meddling in laws governing the creation of mortgages for people buying homes. The upshot of the laws has been that - as seems to be the case everywhere - mortgage people have to do more, be responsible for more, and be personally liable for more.
Processing of mortgages at credit unions is particularly adversely affected by these laws. The reason is that credit union loan officers do not work on commission!
You might think this is a good idea. You might think "Why should I pay $3000 for a loan at a mortgage bank, when I can pay $650 for a loan at a credit union?" That's a fair question, let's answer it!
First, consider that over the course of a 30 year loan, the $3000 you pay for a mortgage professional to do your loan is $8.33/month. The $650 you pay a paper shuffler is $1.80/month.
When you hire someone to work for you, do you check their resume, or check their online ratings, or at least do a comparison of the prices they charge? Lots of people do all three. Many people take into consideration the type of job they want done, and find the services that they think will produce the desired outcome for the minimum amount of money.
So to begin with, when you hire someone to do your loan for you, you need to think about what type of person you are hiring to help you with the biggest purchase you are ever likely to make. The results of this decision will bind you for the next 30 years. So you should take into account the reputation of the company and the individual that you will entrust with all of your financial information.
Do you really want a $2.70/hour paper shuffler to do your mortgage? That's what a $650 loan origination fee buys you! $650 divided by 30 days divided by 8 hours/day. And you can't call them on the evenings, weekends, or holidays. Files just sit there if they are on vacation, because there is no one else to handle them. These people can make the same amount flipping burgers with a lot less hassle. They do not have reviews that are available to the public. There is a chance that your loan officer was just moved to mortgages from the auto financing department.
Would you rather have a $12.50/hour professional handle your loan? That is $3000 divided by 30 days divided by 8 hours/day. With a professional, you will have 24 hour a day access on weekends and holidays. They have a team of professionals working with them to take up the slack if they are sick or take a vacation. These people are driven to make your life run as smooth as possible, because your comments on their review will be available on the internet. Mortgage processing is all these people do. There is a good chance that mortgage processing is all they have ever done, and they know it backwards and forwards.
If you are one of those people who always take the cheapest way, and don't mind the hassle, lack of communication and lack of concern for your situation, then a credit union mortgage might be for you.
If you want professional care, and appreciate smooth processing and the anticipation of any problems so they can be fixed now instead of being a crisis later, you might want to consider this type of professional for your mortgage.
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