Splitting mortgage between bank and credit union

ryaner1979

Can anyone give me advice on getting a loan from the credit union along with a mortgage from the bank towards building our house.
We are looking to build next year at a cost of 250k. By then we will have about 80k saved towards the cost of building. That leaves us looking at a mortgage of 170k which is about 800 a week over 30 years. Would it be possible to get a loan from the credit union for say 40k which I believe would have a much lower rate of interest. Anyone any advice on this?

By the way we are not in the credit union at present so we understand we would have to take out some smaller loans in the next year or so before looking for a larger loan towards our house.

StillWaters

The credit union will be a higher rate of Interest than the mortgage. Also, Credit unions won't loan for house purchase. It makes much more sense to finance the build wit savings and mortgage.

phormium

Credit Unions will lend for houses however they would want first charge on the property which you cannot give as the bank will want that too for the mortgage.

ryaner1979

phormium wrote: »

Credit Unions will lend for houses however they would want first charge on the property which you cannot give as the bank will want that too for the mortgage.

Cheers for the feedback. This post means its a non runner so

The_Conductor

Credit Unions are *not* allowed lend for residential housing.
Some credit unions did in the past- and are now in trouble.
There were new rules drawn up and they are being imposed, by the Central Bank and the Financial Regulator. Failure to adhere to them can result in a credit union being wound up.

ryaner1979

The_Conductor wrote: »

Credit Unions are *not* allowed lend for residential housing.
Some credit unions did in the past- and are now in trouble.
There were new rules drawn up and they are being imposed, by the Central Bank and the Financial Regulator. Failure to adhere to them can result in a credit union being wound up.

Any link to this?

phormium

Well I don't what they are calling the loans but they are definitely for houses and they take a charge over the house as security. Would doubt very much it is against the rules as this is a well run credit union I am familiar with.

In fact I would say this is a huge future opportunity for credit unions, customers wanting low priced houses on small incomes where the banks will not entertain them at all.

The_Conductor

ryaner1979 wrote: »

Any link to this?

I'll go through this when I have a chance- but the page with all the guidance docs and regulatory requirements for Credit Unions, is here

phormium

"9.2 Professional legal advice should be obtained when taking security for large
or complex loans e.g. bridging loans, commercial loans, property loans etc
to ensure that legal title is properly perfected and enforceable in the event
of default. "

This bit under Security for Loans is advising them how to do it so unlikely it is against the rules.

No Pants

ryaner1979 wrote: »

800 a week over 30 years.

What size loan?

Gone West

No Pants wrote: »

What size loan?

I'd imagine it was a mistake, and that this is the per month cost.

ryaner1979

No Pants wrote: »

What size loan?

Sorry 800 a month for 170k over 30 years

Citycap

The max time limit for a credit union loan is five years. I am not criticising you but what you are suggesting is the exact behaviour tolerated by Credit Unions during the boom and what has led a lot of them into trouble.
The Financial Regulator is going through all credit unions at the moment like a dose of salts. Every loan, and particularly large loans are being examined for ability to repay, meeting lending requirements etc.
I think your suggestion is a complete non runner Sorry.

ryaner1979

Citycap wrote: »

The max time limit for a credit union loan is five years. I am not criticising you but what you are suggesting is the exact behaviour tolerated by Credit Unions during the boom and what has led a lot of them into trouble.
The Financial Regulator is going through all credit unions at the moment like a dose of salts. Every loan, and particularly large loans are being examined for ability to repay, meeting lending requirements etc.
I think your suggestion is a complete non runner Sorry.

Thanks....I was looking for advice so no need to be sorry. Will stick to the bank so. The amount you pay back is frightening though. 170k works out at roughly 290k :eek:

phormium

That info about Credit Union loan terms is not correct, 15 yrs is the normal home loan term with them.