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Know the limitations of credit unions

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Justin da Rosa | 02 Mar 2015, 09:17 AM Agree 0
Credit unions are slowly earning their chunk of the mortgage market, but brokers warn investors and homebuyers about the potential pitfalls of not knowing the limitations and carefully reading the fine print.
  • Andrew Crosby | 04 Mar 2015, 12:10 PM Agree 0
    I work for a Credit Union.

    And it's true that with many Credit Unions you may be unable to port your mortgage to another province and this is important for some consumers -- especially those who know they are likely to be moved such as those serving in the RCMP or Armed Forces. However for many more consumers the likelihood is not that you will move provinces, it is that you will move within your province. And when you do you may still find your lender won't qualify you to port your mortgage (because you still have to qualify!). The reason is the "one size fits all" lending policies of the big banks and monoline lenders are designed for efficiency and profit -- not to help you achieve your goals and save you money. Credit Unions, with their local knowledge and decision making, are often more willing to find a way to help you port your mortgage to the new house -- especially if that home includes rental income, is a new home under construction, or you are a self-employed person.

    So this article is not wrong in saying a Credit Union might not be the right fit for your mortgage -- it just misses the mark on pointing out the reasons a bank or monoline lender might also not be the right fit for you. So chat with your banker, and chat with your mortgage broker, but don't miss the opportunity to chat with a local Credit Union too -- it might just be the best option for you!
  • Wm B. Williams | 12 Mar 2015, 11:48 AM Agree 0
    I guess credit unions don't pay commissions to mortgage brokers for bringing in new business?
  • LF | 09 Apr 2015, 12:26 PM Agree 0
    Yes! Wm B. Williams, there a lot of credit unions that do pay commissions to mortgage brokers for bringing in new business. As a mortgage broker I can say that some credit unions are great partners for the broker community as they will look at the "make sense" aspect of lending that is outside the big bank box! We love credit unions!
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