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Buddying Up with my Credit Union

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The theory behind a credit union is that it’s working for you (and every other member) whenever it operates. That means that as an account holder you get favorable returns on your savings, checking, and money market accounts as well as good interest rates on your loans. The company I work for has a credit union and I opened an account within the first week of working because I knew somewhere down the road I might turn to them for a mortgage. Well, I poked around with LendingTree and two other mortgage-finding services (still only one response!) and it’s about time I talked to my credit union.

This was brought on by the this article, written by Gerri Willis, where she says that becoming buddy buddy with a small bank now may pay off later, when the housing price growth cools down. Basically, when the market slows down and a bank begins to foreclose on homes, the relationship you develop now will put you ahead of the game when the slowdown occurs. The bank won’t want to keep the properties, they’ll want to sell them to you.

Her tip is to first target the right bank, one that holds at least 55% of the mortgage loans it sets up. A bank can sell the loan whenever, it’s in the fine print if you read carefully, and they can’t foreclose on a loan if they don’t own it. After you target the bank, move your finances there to build a level of trust. They can trust you if they see your money! Then, the short article moves into discussing how to target areas and stuff like that which isn’t important to me at the moment.

So my plan of attack now is to talk to some local small banks and seeing if they can give me a favorable mortgage. Right now, the best seems like a 30 Year Fixed with monthly payments of around $1500 on a $250k loan (via LendingTree). If they can give me a pretty good offer and fit some of the other criteria Gerri mentions, I’ll consider giving them my business. But first things first, the credit union deserves a visit.

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