Good credit unions in Chicago?

Question

I am looking for the best possible deal on a mortgage (leaning towards higher credits as I plan to fix and flip) on a 5 percent down mortgage payment. I've looked at a lot of banks, but am curious, does anyone in the Chicagoland area have recommendations with regards to interest rates/credits?

Andrew Holmes · Answer

If it’s your first home then buy it with cash. Rehab and the do a cash out refi at residential rates 30 yr fixed. Or borrow money for the purchase and rehab. Make sure that that’s the wire that is coming in on the day of the closing and that amount is reflected on your HUD statement as a loan.

As long as it’s properly documented with a mortgage and a note. With the exact amount of purchase plus rehab properly shown on the hud. You can fix up the property and refinance it right away without waiting six months that will be your cheapest option as owner occupied

John Warren · Answer

@Shahab Siddique an ARM gives you a lower interest rate because the lender's interest risk is not locked in for 30 years. This means that your interest rate would go up in the future. Not everyone uses this, but it is an interesting strategy as most investors don't hold their 30 year notes for very long at all.

I think a lot of investors get caught up in the interest rate game where they are trying to beat their lender to death to save $9 every month. This is where having a great lending partner really helps with your strategy.

Shahab Siddique · Answer

I'm presenting- as a primary residence :)

John Clark · Answer

"I am looking for the best possible deal on a mortgage (leaning 
towards higher credits as I plan to fix and flip) on a 5 percent down 
mortgage payment. I've looked at a lot of banks, but am curious, does 
anyone in the Chicagoland area have recommendations with regards to 
interest rates/credits?

Updated 2 days ago

Note: this is our first home, so we can get a traditional mortgage on this"

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You've gotten a lot of good advice, but I have to ask: Why present the house to the bank/credit union as a fix and flip? You said you were going to live in it (that's how I interpret "out first home"), so why not buy a two flat, fix it while living in it (with a reasonable mortgage and use your $500k for down payment and renovation), and THEN sell and buy another that you can THEN present to the bank as a fix and flip, showing that you have some experience under your belt? Variation -- cash out refinance and buy second property --presented to bank as fix and flip. Give the bank some experience to go on. Chasing that extra quarter point in interest savings for a short-term holding just doesn't seem worth it. Consider it the cost of gaining experience you can prove. Getting started is more important than getting a rock bottom rate.

Jonathan Satizabal · Answer

I use CreditUnion1. They're one of the larger credit unions not sure if they're the best but they had great rates on their HELOC's.

The HELOC was basically free to get. The only cost was the appraisal and they waived the appraisal as long as you used 2.5 or 5k with in a month or two. I don't recall the exact terms. The process was really easy too.

I'm not sure about their mortgages but the website said they are offering 100% financing.

Andrew Holmes · Answer

@Shahab Siddique

Great. thanks you.

Shahab Siddique · Answer

@Andrew Holmes thanks for the information- by the way, I attended a few of your REIA meetings in Chicago/suburbs a few years ago- gained a lot of good info!

Cheers,

Shahab

Shahab Siddique · Answer

@John Warren interesting- what are the benefits of using an ARM vs fixed rate? I'm unclear from your message

Crystal Smith · Answer

I assume when you say 5 percent down mortgage that you plan on living in the home for at least one year after which you'll try and sell. If that's the case I can provide recommendations for lenders. Most of the rates are going to be around the same.

If you don't plan on occupying the property then there's a different class of lenders that you need to approach but they don't work on the 5% down guidelines. I can refer you to those lenders in Chicagoland as well.

John Warren · Answer

@Shahab Siddique it sounds like you are looking for a super low interest rate? What exactly does the best deal on a mortgage look like to you? In my mind, I would probably lean towards keeping as much cash in my pocket as possible at this point in the cycle as interest rates are so low anyways. I read an interesting article a few months back about why most people would be better served doing an ARM loan instead of a 30 year fixed. Most Americans aren't holding their loans very long and are actually churning so much money in closing costs as they refinance to save 1/4 % interest...

Good credit unions in Chicago?

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