Refinancing Your Mortgage The Easy Way - My Credit Union Story
In 1863, The National Bank Act established the first system of banks in the United States. Ever since then, people have been starting banks, earning handsome profits and selling banks. This concept of banking for profit is one of the hallmark's of the US financial system. However, in 1909, a different philosophy came to bear. Two men, Edward Filene and Pierre Jay, both of Boston established the first US Credit Union. The credit union was based upon the concept that individuals could collectively help each other build maintain and expand wealth through a collective banking system. Credit Unions are member supported institutions chartered with the intention of serving the banking needs of its members and not singularly to make a profit. Although, make no mistake, Credit Unions turn a handsome profit.
So, why is all this important? It's important to understand the context of my story. I own a home valued at over $500,000. Carrying the finance charges on that mortgage is a nice piece of business for any lending institution. At my initial 5.75% 30 year mortgage, the interest paid to the lending institution was $550,431. Not bad. Well, as interest rates began to drop, I looked to refinance. I called several banks that wanted to refinance my mortgage to a great rate of 3.49%, with closing costs of between $1,500 and $2,900. That was certainly an attractive offer, but I knew that I could do better. So, I called my Credit Union.
