What's the difference between Banks, Credit Unions, and Mortgage Lenders?

August 27, 2019
Author: New England Home Mortgage

Mortgage loans help to finance one of the most significant purchases of your life. And there are so many different types of loans and options to consider. 

Do you want an FHA or Conventional loan? Do you qualify for a VA or zero down payment option? Would you like a 30-year or 15-year mortgage? Fixed-rate or ARM?

On top of these options, there are different lenders that can loan you money for a mortgage.

Comparing Lenders with a Mortgage Broker

It takes a great deal of time to “shop around” for mortgage loans - especially if you want to be thorough and check out multiple options and lenders. That is where mortgage brokers, like the team at NEHM, can guide you.

Mortgage brokers do not actually lend money. Instead, brokers have access to many different lenders and loan programs. By learning about your financial background and needs, mortgage brokers can help match you with lender and the loan that best fits your needs. This allows you to go to one place and compare options with an unbiased professional who can review the pros and cons of each loan. 

Below, we review the types of lenders that may supply your mortgage loan. 

Banks and Mortgage Bankers

Banks and mortgage bankers loan money for mortgages, and also offer a variety of financial services. Mortgage loans from a bank or financial institution are approved based on the bank’s underwriters. Banks do not always offer government-backed loans such as FHA, VA, or USDA loans. 

Credit Unions

Credit unions are member-owned financial institutions. As a credit union shareholder, you could get lower interest rates than with other lenders.  But similar to banks, government-backed loans are not always an option. 

Mortgage Lenders

Mortgage lenders offer just one service: mortgage loans. Because lenders have only one focus, the entire process can typically be taken care of in-house, and at a faster rate than banks or credit unions. 

As you go through your pre-approval process, your mortgage broker can explain in more detail the types of loans, as well as the lenders, that you are eligible to choose from. 

Are you ready to secure a mortgage loan? Contact us to begin the pre-approval process!

(860) 736-2747
37 W. Center Street, Suite 208, Factory Square, Southington, CT. 06489