Knowing credit unions’ limitations

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Credit unions are slowly earning their chunk of the mortgage market, but brokers warn of the potential pitfalls of not knowing the limitations and carefully reading the fine print.

“When it comes to porting a mortgage credit unions have one big disadvantage: If you have to move out province you will not be able to port your mortgage and will have to pay a penalty to break the mortgage,” one broker wrote on “Also [with] some CUs you have to live in a certain distance from the nearest branch. If there is no branch near your new home, you will not be able to port your mortgage.”

Credit unions currently account for six per cent of mortgages funded in Canada, according to CAAMP’s latest Annual State of the Mortgage Market in Canada report.

And while they may be growing in popularity, brokers have mentioned the potential shortfalls of the mortgages on offer from certain companies, including refinancing and porting limitations.

However, as one reader points out, these limitations aren’t ubiquitous across the channel and it’s all about doing your due diligence before closing the deal with a client.

“Some credit unions do operate in more than one province. Credit unions also have much more flexibility than a bank or monoline, and offer common sense in a banking industry that has lost that,” a broker wrote on “I have worked for banks, credit unions; and as a broker, credit unions are my choice over monolines or banks any day.”
  • Alain Payette on 2015-02-27 12:12:07 PM

    Over 50% of the market to the credit union in the province of QC.

  • Isaak Friesen on 2015-02-27 1:39:39 PM

    I send over 80% of my business to Credit Unions. They have Common sense. Banks have none.

  • OkanaganBroker on 2015-02-27 3:15:32 PM

    Agree with Isaak, Credit Unions still have staff who can actually make decisions instead of just following a "rule book" I spend far less time on each deal done with a CU than with any other lender, and time is money. Not to mention my local CU's provide excellent service to me and my clients...One client was recently hit with an addtional closing expense (prepaid property taxes that were not refundable from the city) so she had to pay for the vendors over exuberant tax installments...One call from me and the CU gave her a $5,000 unsecured LOC and she was able to sign for it within 1 hr....That is Service!
    The restrictions noted in the article are real, so the old rule applies..."Know your client"

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