Credit union vs bank vs mortgage broker: how to compare

Full disclosure

This guide is on the website of a loan officer who works at a credit union. Keep that in mind, and use the questions below to test any lender, including this one.

Credit unions

A credit union is a not-for-profit financial cooperative owned by its members. You generally need to be eligible to join. Many credit unions handle processing, underwriting, and closing in house, which can make communication simpler.

Banks

Banks are for-profit lenders. Some keep loans in house and some sell them. Their products, rules, and pricing vary widely, and larger banks may have more specialized loan programs.

Mortgage brokers

A broker does not lend its own money. It compares options from multiple wholesale lenders and places your loan with one of them. That can widen your choices, and you will still want to understand who the actual lender is and who will service your loan.

Questions that matter more than the label

1. What is the total cost? Compare the Loan Estimate from each lender, including fees.
2. Who underwrites and closes the loan, and are they in the same building as your loan officer?
3. How often do your loans close on time? Ask for specifics.
4. How will I get updates, and from whom?
5. Who will service the loan after closing, and could that change?
6. What happens if the appraisal or my documents come back with a surprise?

How to compare fairly

Apply with more than one lender in a short window, get each Loan Estimate, and compare them side by side. Credit inquiries for the same type of loan within a short period are generally treated as one.

Learn more about how closing works or plan your timeline.