Thursday, September 25, 2014

Credit Unions and Jumbo Mortgages

An article in The Wall Street Journal advises readers to look at credit unions for jumbo mortgages; but also warns readers to shop around.

The article points out that credit unions have grown their market share of mortgages from 3 percent to 10 percent over the past decade; but jumbo mortgages remain a small part of the total mortgage volume of most credit unions.

In general, it is the larger credit unions, like Navy FCU (Vienna, Va.), Bethpage FCU (Bethpage, NY), and PenFed (Alexandria, Va.), that are making these loans, although some smaller credit unions originate jumbo mortgages for relationship building.

Those credit unions that are offering jumbo mortgages tend to operate in markets with higher real estate prices, such as Washington, D.C., California, and Long Island, NY.

However, the article points out that interest rates on credit union jumbo mortgages are not necessarily lower than those offered by banks or other lenders and the amount that credit unions have to lend tends to be smaller.

Therefore, if you are looking for a jumbo mortgage, it pays to shop around.

Read the article (subscription required).
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