Borrowing Money For Smart Real Estate Investing - Banks vs Credit Unions in 2023

Before you close on your first investment, you'll have to make lots of new decisions. For example, you'll need to select where you want to invest, what type of property you want to buy, whether you want to rent it out or flip it, and other factors. Few decisions are as important as deciding the institution to utilize to finance your real estate purchase and start borrowing money.

In general, while purchasing real estate, investors have two choices. Either pay for the home directly in cash or borrowing money to fund the purchase. When it comes to financing the acquisition, investors have even more important decisions to make.

Real estate investors can choose from a variety of different credit options, including mortgages. However, deciding on the correct lending product is only half the battle. You'll need to pick which form of the financial institution is most closely connected with your beliefs and aims after you've chosen a lending product that meets your investing objectives.

Many people will likely head to the nearest large bank first. International and national corporate bank chains frequently offer a wide range of well-publicized lending products. Smart investors, on the other hand, understand the advantages of shopping around for a mortgage. Before borrowing money from a bank, they are likely to visit local banking institutions and credit unions.

Now, there is a lot more to mortgages than simply borrowing money, so in order to give you a fuller picture, after this article we encourage you to click the link below to book a frees strategy call with our team at LendCity today.

The advantages of borrowing money from a corporate bank

While corporate banking institutions may not give the best rates, there are a number of advantages to borrowing money from a major national or even worldwide institution, including the following:

More branches/national reach

One of the major advantages of borrowing money from a business bank is its nationwide reach. You can talk about your mortgage with a branch almost anywhere in the country. This is especially useful if you have investments in several cities or provinces or your principal investment is in a place other than your own.

A greater selection of products

Larger banks typically provide borrowers with a far broader range of products. This implies you don't have to take out a typical 30-year fixed-rate mortgage. Based on the lender's offerings, you can safely choose the best mortgage programme for your needs.

Better technology and payment options

Because big banks have a lot of resources, they can roll out substantial technological advancements far faster than their smaller competitors. This makes it easy to pay down your mortgage, communicate with a customer service representative, and complete other administrative activities.

Additional freedom for larger investors

If you're building a significant real estate portfolio, larger institutions can frequently provide you with more options. They'll recognize your standing as a real estate investor and be able to help you in ways that a smaller branch or institution can't. Larger lines of credit waived account fees or consolidated account structures are examples of this.

Discover How To Apply For An Investment Property Mortgages With This Step By Step Guide

Borrowing money from a credit union loans have a number of advantages

Are you thinking about partnering with a local bank or credit union? As a real estate investor, you can not only locate a lender with better rates, but you can also feel good about keeping your transaction local and supporting a local business by borrowing money. Consult with a credit union about securing a loan for your next real estate acquisition. This is why:

Supporting local businesses

Working with a credit union or a community bank keeps your money in the community. This is far more valuable than you may believe. You're not only helping other local company owners, but you're also building a network of professionals in the region. Investing in a credit union can aid in the development of goodwill and connections.

Lower rates

Many credit unions offer lower rates and fees compared to large national bank chains. As a result, your operating costs will be cheaper, and you'll be able to get more money out of your investment.

Your loan is less likely to be sold

It's pretty normal for large, institutional lenders to sell debt. While the vast majority of the time, a bank selling your mortgage has no direct influence on you, it can make the process of finalizing your loan substantially more difficult. When you engage with a local credit union, your debt is less likely to be sold.


If your portfolio grows large enough, your credit union or local bank may consider you a large customer. This entails controlling a more favourable connection and receiving special rates on specific products. Leverage is a term used to describe a group of assets held by a single financial organization.

Looking for a home loan

Regardless of whether you plan to deal with a corporate bank or a credit union, knowing how to shop around for a mortgage is critical. There's a good possibility you'll miss out on a lending product that suits your needs and aligns with your investing goals if you don't shop around for products from a variety of lenders. Here are a few pointers to remember when looking for a mortgage:

Pay attention to fees as well as interest rates

When looking at mortgage products, your gaze is likely to be drawn to the interest rate. While this is unquestionably the most significant aspect of your mortgage, it's equally crucial to consider the fees associated with the loan. Some low-interest mortgages come with extremely high fees.

Compare the same product types

When looking for a mortgage, it's critical to compare the same loan type from one institution to the next. You won't know what one lender offers over another if you're comparing multiple types of lending packages.

Consult a broker

Shopping for a mortgage might be a challenging task. Numerous financial organizations provide a diverse range of lending solutions at various price points. Working with a broker is a terrific approach to ensure that you get the best loan possible out of a sea of possibilities.

It takes a lot of time and effort to search for and find the correct mortgage for you. Selecting a financial institution with care guarantees that you need the tools to profit from your property. It can be a time-consuming procedure, but you'll be rewarded with a higher return on investment if you put in the effort.

Before you consider borrowing money from any particular lender, click the link below to book a free strategy call with us so we can show you the pros and cons of borrowing money from the lender you are looking at.

Should You Get Your Funding From A Bank or Credit Union? With Scott Dillingham