Lending Institutions

Credit Unions - A credit union is a financial cooperative chartered by the government and owned by its members. Credit unions offer members a place to save and borrow at reasonable rates. Credit unions are non-profit so any profit is returned to members in the form of dividends.

Credit unions started around 1900 to help savings among members of different organizations. Credit unions are financial institutions that operate not for profit but for service. Reports show that credit unions lead the financial community in providing quality service to it's embers

Federal credit unions are chartered, supervised, and insured by the National Credit Union Administration, an agency of the federal government.

Credit unions work on encouraging members to save regularly and build financial stability for themselves and their families. Credit union members provide each other another with loans and home mortgage from their pooled savings.

Each credit union's charter specifies who is eligible to join. Membership is limited to a specific group of people with a common bond of employment, association, or residence specified in its charter. Eligible people must submit a membership application and purchase one share to join. Members actually join by making a small depost into the credit unionfund. By depositing the money the members actually purchase and own a share in their credit union and can vote in officer elections.

Mortgage Brokers - A mortgage broker is an agent used for the purpose of arranging a home loan. Mortgage brokers must legally disclose to you the material facts you need to know about the loan.

The broker legally must be fair and honesty to both you and the lender. These legal duties can be important in resolving disputes which arise after the loan is made. The best way to avoid problems and disputes is to ask questions and be sure you understand the terms of the loan and each of the loan documents before you sign.

A mortgage broker speaks on your behalf in submitting your loan application to a lender. Since they are working on your behalf make sure that you give the broker full and accurate information.

Mortgage broker commissions and lender fees are not set by law. Mortgage Brokers can be paid either by you or by the lender. Compare fees charged by several mortgage brokers. Ask about the amount of the fees and costs to be paid by you in cash before the loan is funded, the amount of the fees and costs to be paid from the loan proceeds or lender rebates, and the amount of fees and costs to be financed. Be sure you understand everything that is written before signing the documents.

Banks - Banks provide services related to the storing of deposits and the extending of credit. A Banking license is granted by bank regulatory authorities and provide rights to conduct banking services such as accepting deposits and making loans. There can also be financial institutions that provide banking services without meeting the legal definition of a bank. Banks are a subset of the financial services industry. Banks generates profits from transaction fees on financial services and on the interest it charges for lending.

Banks are required to purchase deposit insurance to make sure smaller investors are not wiped out in the event of a bank failure. Banks are regulated so that no government can allow the banking system to fail. There is always a lender of available in the event of a liquidity crisis, when short term obligations exceed short term assets. The government will step in to lend banks enough money to avoid bankruptcy.