Credit Unions?

Does anyone use credit unions? The credit union in my area offers much better mortgage rates than all the local banks, however, I’ve never done business with a credit union so I’m looking for opinions.

Sure. Credit Unions are the ultimate ‘community’ bank. They make decisions locally (generally) plus they pay no federal income tax therefore their loan rates are usually a bit more competitive.

Credit unions are also owned by the members so their non-profit status means they don’t have to make as much as regular banks.

You should also check with a mortgage broker. Our mortgage office can typically beat the local posted bank rate by 1/4 to 3/8 of a point. However one thing to keep in mind is that if you do approach a bank, they will sometimes offer you a better rate than their posted rate also so you do have to shop around. About 60% of loans done are through mortgage brokers so they do have the buying power to get you a lower rate than a bank. They also have access to subprime loans that banks don’t do.

Really, I was under the impression that rates at banks and credit unions are non negotiable…

Even bankers have to operate in a capitalist system. They price thier loans based on many criteria; credit quality, loan terms, market interest rates, supply/demand etc. Everything is negotiable.

In regards to mortgage rates not being written in stone, I have always wanted to begin a career (along with RE) working in a bank after graduating from university and work my way up the corporate latter. Now that you guys have brought to my attention that mortgage rates are negotiable even in traditional banks; would it be possible to obtain substantially lower mortgage rates if you are employed as a mortgage specialist at a bank?

Would such a position be beneficial to an aspiring real estate investor?

It’s possible. Sometimes they offer discounts to employees. many credit unions have tight guidelines on investor loans, though.

Depends on the bank. One large bank which I won’t name but they’re probably one of the top 5 banks in the US doesn’t really give their employees much of a break. A friend of mine that worked there had to go somewhere else to get a better rate on her loan. Also a deal I’m doing right now has that bank employee going to a different bank because they got better rates from someone else.

Things may vary at different banks.

Also if you’re a mortgage specialist, I believe there’s some rule that says you can’t do your own loan, conflict of interest and all that, you have to find a friend in the business that will do it for you.

What basically happens at banks is that you’ll shop around for a rate and you’ll realize that the banks are charging about 1/4 - 3/8 of a point higher than someone else and they’ll probably come down a little bit from their initial rate, but it’s hard to say how much they will come down.