In THIS Economy?Many Millennials expect to rent for a long time (or forever) because homeownership feels so out of reach.
From Dream to RealityThankfully, there’s a financial institution out there that wants to help you realize that dream.
Enter: Credit UnionsWith better interest rates (and less stringent credit requirements) credit unions are a great alternative to banks.
Between student debt and rising home rates, many millennials are postponing the homeownership dream. In fact, 12% of millennials expect to never own a home ever. Many others expect to rent for quite a while — to save money and have some more flexibility when it comes to location.
But many elder millennials (born somewhere between 1980 and 1990) are a kid or two deep and ready to stay in one place for a while.
If you’re reading this post, you’re likely in this group, or perhaps a younger millennial who is a little more stationary than most.
Either way, you’re here because you’re planning to leave the Rent Life behind. Noice 🙌
Your first step (other than saving) is to learn more about your options and where to get a home loan. Our suggestion? Credit unions.
But WHY Credit Unions?
Before we give you the best credit unions for mortgages, let’s learn a little about credit unions.
First off, credit unions have your best interest at heart. They were created to help the average people like you and me achieve our financial goals — like homeownership.
Credit unions are not-for-profit financial institutions that are owned by the members. When you join, you become one of those members.
That means, instead of some bankers profiting off your hard-earned money via outrageous fees and increasingly high interest rates on loans, you are the one benefiting. As in, any money you pay in fees and interest goes right back to you in the form of fewer fees and better interest rates.
In short, credit unions help spread the wealth instead of making the rich, richer.
And because home loans are so large, even a 1% lower interest rate can have a huge impact on the total interest you pay. We’ve even got a post that can help you learn more about credit union mortgages.
Best Credit Unions for Mortgages
Connexus doesn’t have many physical locations, but they are trying to reach younger Millennials — by ramping up their online presence and making digital mortgages easily accessible. They offer a range of fixed-rate and adjustable-rate mortgages and despite having so few physical locations, customer support is available across a wide variety of channels.
And, like many credit unions, Connexus is more likely to consider alternative credit data, making a mortgage more accessible to those of us whose credit scores have taken a hit. This might be the best credit union for first-time home buyers.
And it’s easy to join, too. All you need to do to join is make a $5 donation to their charity — Connexus Association.
Looking for a home equity line of credit? PenFed might be a good option for you.
What is a home equity loan? It’s a type of loan in which the borrower uses the equity of his or her home as collateral. The amount borrowed is determined by the value of the property, which in turn is determined by an appraiser from the lending institution.
PenFed pays most closing costs, too. And while PenFed has a more modest selection of services, they make up for it with good interest rates on checking accounts and good APY on savings accounts. And they have an app to make it all easy-peasy.
Another credit union that’s great for first-time home buyers is Alliant. They offer low- or zero-down loans for members who apply online or over the phone. And, if you stick with Alliant until you get a second mortgage later on, you can put as little as 5% down with no mortgage insurance.
If you don’t mind not having access to a physical location (unless you’re in Chicago) then Alliant may be a good choice for your mortgage needs (and all your other financial needs, tbh).
If you’re a veteran, Navy Federal isn’t just a good choice for a mortgage — it’s a good choice for almost everything. They have incredible customer service and a wide range of affordable services for military members and their families.
Like many credit unions, they’re also willing to look at credit data other than your credit score, such as on-time rent payments, when evaluating your mortgage-able-ness (put that in the dictionary).
Their website doesn’t provide customized mortgage rates based on credit scores before you apply, but like most of the credit unions listed here, they also accept online applications.
Best Credit Unions for Mortgages are … Any Credit Union, Really
Okay, so we can’t say every single credit union should be included in our “best credit unions for mortgages” list, but we can say that, overall, credit unions are often a solid alternative to banks. Why?
Like we said above, credit unions were founded to help the average working-class person get the financial services they need without making the rich bankers richer. So those better interest rates we mentioned? Those often apply to mortgages, too.
It also means they care more about you and your unique situation. And let’s be real, it’s always nicer to have a person talk you through your questions rather than an AI or FAQ section.