Many credit unions are losing mortgage business because they are not providing comprehensive mortgage solutions.
Did you know Government lending programs alone make up almost 20% of the mortgage market?
For good reasons, too. These loans offer borrowers benefits like lower down payments and monthly payments, with the intent to make home purchasing a more accessible housing option.
FHA
These loans are backed by the Federal Housing Administration (FHA). FHA loans allow people to pay a lower down payment, potentially as low as 3.5%. This provides a low-down payment and expanded eligibility options for your members.
VA
These loans are backed by the United States Department of Veteran’s Affairs and are only available to members of the armed forces and veterans, and their surviving spouses. VA loans do not require down payments or mortgage insurance, and often have competitive interest rates.
Overall, these two programs are worthy options for members in the market for a home loan.
A harsh reality, though, is that most credit unions don’t offer these programs.
One of the biggest challenges with providing government lending is obtaining the authority to underwrite the loans internally. Credit unions must have the experience level and the qualification from an underwriting perspective. There are also significant internal quality control requirements and a supplemental financial audit that is submitted to the Department of Housing and Urban Development (HUD), which may come with an additional cost.
Achieving all of this can be difficult for credit unions, creating significant barriers when it comes to offering government lending programs. Which means many members are forced to search elsewhere.
Offering government lending programs expands mortgage product offering to members, including veterans. Additionally, credit unions that expand their products to include government lending will be more competitive in the financial market.
Current forecasting for 2021 indicates that lending for home purchases will increase while refinancing is likely to slow down. Offering government lending products is an area of opportunity credit unions don’t want to miss out on. And more importantly, it’s another opportunity for credit unions to continue serving their members.
With our turn-key Government lending platform, credit unions can offer these products to their members. Our services operate under the credit union’s brand so that members can keep interacting with their trusted credit union.
Remove the barriers keeping you from serving your members. Learn more about our turn-key government lending platform today.