Buying a home is one of the biggest financial decisions you'll ever make. It's an exciting milestone, but the path to home ownership can feel overwhelming, especially in today's competitive housing markets. You'll face a flurry of choices, and one of the most critical is deciding where to get your mortgage. Should you go with a large, national bank or a local credit union like Everwise?
Many Hoosiers and Michiganders default to big banks, assuming their size and name recognition mean better deals. But that's a common misconception that could cost you thousands over the life of your loan. As a not-for-profit, member-owned financial institution, a credit union operates on a fundamentally different model that puts you, the member, first.
Let's break down the real differences between getting a mortgage from a bank versus a credit union, so you can make an empowered choice for your future.
What is the main difference between a bank and a credit union?
The primary distinction between a bank and a credit union lies in their ownership structure, and this impacts everything from rates to service.
- Banks are for-profit institutions owned by private shareholders. Their main goal is to generate profit for these investors. This often translates to higher interest rates and fees for customers to maximize shareholder returns.
- Credit unions are not-for-profit cooperatives owned by their members. That's you! Instead of paying shareholders, credit unions return their earnings to members through better rates, lower fees, and improved services.
At Everwise Credit Union, our mission isn't to create profit. It's to support the financial well-being of our members right here in Indiana and Michigan communities like Indianapolis, South Bend, Valparaiso, and New Buffalo. We don't answer to Wall Street. We answer to you.
How do mortgage rates and closing costs at credit unions compare to big banks?
Let's be direct: interest rates and fees have a massive impact on your monthly payment and the total cost of your home. This is especially important as home prices continue to rise. Because credit unions are not-for-profit, they consistently offer some of the most competitive rates on the market.
- Credit unions: Financial analyses consistently show that credit unions typically provide lower average interest rates on mortgages. They also tend to have lower closing costs and origination fees. A seemingly small difference in your rate can save you thousands of dollars over a 15- or 30-year loan term. For a typical $200,000 home in Indiana or Michigan, even a 0.25% rate difference can save you over $30,000 over the life of your loan.
- Banks: Since banks are profit-driven, their rates and fees are structured to benefit their shareholders. This can result in higher overall costs for borrowers.
At Everwise Credit Union, we use our not-for-profit status to pass savings directly to our members. It's not a special promotion. It's just how we do business.
Is it easier to get approved for a mortgage at a credit union?
Getting approved for a mortgage can be stressful, especially if your financial picture isn't "perfect." This is where the personalized approach of a credit union like Everwise truly shines.
- Banks: Large banks often rely on rigid, algorithm-based underwriting. If your credit score or income doesn't fit neatly into their predefined boxes, you might be denied automatically, with little room for discussion.
- Credit unions: We look beyond just the numbers. While your credit score is important, we take a more holistic view of your financial health. We consider your employment history, your relationship with the credit union, and your overall financial progress. We're more willing to work with members to find a solution, including offering flexible loan options for first-time home buyers or those with smaller down payments.
As a member of our community, you are more than just an application number. We believe in understanding your story and helping you achieve your home ownership dreams, whether you're looking in Indianapolis suburbs, Niles neighborhoods, or rural areas throughout both states.
Will my mortgage be sold if I choose a credit union?
Have you ever had a question about your loan, only to be routed through a confusing call center halfway across the country? It's a frustrating experience many home owners face when their mortgage is sold off.
- Banks: Large banks frequently sell the servicing rights to mortgages to third-party companies. This means the institution you chose to work with is no longer the one handling your payments or answering your questions. You become just another account in a massive portfolio.
- Credit unions: We pride ourselves on keeping our mortgage servicing in-house. When you get a mortgage with Everwise Credit Union, you're working with us for the life of the loan. Your mortgage officer is a local expert from your community in who understands the unique housing markets from Bloomington to Ann Arbor. If you have a question, you can walk into a local Everwise branch or call someone who knows your name and understands the local market. This commitment to personalized, local service ensures a smoother, more transparent process from start to finish.
Do credit unions offer the same technology and convenience as big banks?
Some people believe that choosing a local credit union means sacrificing modern technology. That's simply not true anymore.
Today's leading credit unions, including Everwise Credit Union, offer robust digital banking platforms that rival those of the biggest banks. You can apply for a mortgage online, manage your accounts from our mobile app, set up eStatements, and make payments with just a few clicks.
We combine the convenience of modern technology with the friendly, personalized service you can only get from a local institution. It's the best of both worlds for residents who want high-tech tools supported by people who genuinely care about their community.
The Everwise advantage: your community partner
Choosing a mortgage lender is about more than just finding the lowest rate. It's about finding a trusted partner for one of life's most important journeys.
When you bank with Everwise Credit Union, you're not just a customer. You're a member-owner. You are investing in a financial institution that reinvests its resources back into local communities through financial education, volunteer efforts, and support for local organizations from youth sports teams to community development projects.
We are here to do more than just finance your house. We are here to help you build your home and a stronger financial future.
Ready to take the next step?
If you're ready to buy a home in Indiana or Michigan, don't settle for being just another number at a big bank. Discover the difference of working with Everwise Credit Union, where we put people first and treat everyone as though they matter, because to us, they do.
