What Exactly Is Considered A Relationship with a Creditor

[Iusedtolurk]

I recently opened a savings account with PenFed and NFCU.

In a lot of posts I see members referring to building a relationship with both of these CUs in order to have better chances down the road when apping for credit products.

Is opening a savings account and funding it every month (for approximately 6-8 months) enough to be considered as building a relationship? Approx at least 10000 dollars would be in both accounts before a mortage app.

Looking to possibly app for a mortage later in 2022 and I do not need another checking account (I have 2) and I don't want to gain any new/recent accounts by apping for their credit cards which would negatively affect mortgage scores. MMS currently 748 without AZEO.

NFCU and PenFed both seem to be decent mortage lenders although I have read that NFCU sometimes takes 3 months to close a mortgage. I don't think too many sellers would want to wait that long to sell their house so if thats the usual time then that could pose problems.

[CreditInspired]

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@Iusedtolurk wrote:

I recently opened a savings account with PenFed and NFCU.

In a lot of posts I see members referring to building a relationship with both of these CUs in order to have better chances down the road when apping for credit products.

Is opening a savings account and funding it every month (for approximately 6-8 months) enough to be considered as building a relationship? Approx at least 10000 dollars would be in both accounts before a mortage app.

Looking to possibly app for a mortage later in 2022 and I do not need another checking account (I have 2) and I don't want to gain any new/recent accounts by apping for their credit cards which would negatively affect mortgage scores. MMS currently 748 without AZEO.

NFCU and PenFed both seem to be decent mortage lenders although I have read that NFCU sometimes takes 3 months to close a mortgage. I don't think too many sellers would want to wait that long to sell their house so if thats the usual time then that could pose problems.

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I personally consider building a relationship with a CU is when you have been a member for some time. In my case, I have been with NFCU since Feb 2009, and have used their products for 4 mortgages (one was a refinance), 3 CCs (I just got the Platinum to do a BT), and a CLOC, which I've only used once. I also have DD. 

In NFCU's case, I don't believe it is just about deposits on-hand, because during the years, my balances have dropped below $10 on numerous occasions.

And yes, NFCU is slower on the mortgage side, especially since the pandemic; however, my last mortgage, which happened a year ago this month, did close within 45 days. And honestly, the hold-up was the appraiser. Matter-of-the-fact, none of my mortgages closed later than 45 days. Borrowers whose loan take longer are ones that have to go back-and-forth to the underwriter to resolve problems the with the borrower's credit profile/history. 

Also on another note. I've gone through NFCU's Realty Plus Program and each time got a rebate ($2-4K) directly deposited into my savings account within 2 weeks of closing. 

I guess it's kind of obvious that I love my relationship with NFCU. 

[Revelate]

So relationship building for a mortgage is a non-seqiteur: the reason being is hardly anyone portfolios their mortgages and as such they are beholding to the underwriting rules of a third party.  Usually on this forum when we have talked about building relationships, it is for credit cards which are underwritten under an individual lender's policy which means all sorts of compensating factors can be taken into account... like Chase giving me a Freedom on recon nearly a decade ago when I made the point I ran the rest of my financial life through them for the last few years.

There are some marginal exceptions to this, I know Chase and I would expect all the big banks do this will give mortgage loan discounts (both in rate and also origination fee) at various relationship tiers (base CPC and then they had a second line at 1M in assets at Chase the last time I talked to them) which make them competitive on a conventional or even hard to beat at that second tier.

I don't know any CU that has something similar frankly but their rates are typically more aggressive anyway than the big banks for the rank and file consumer.

Unless the lender is portfoliong the loans, you will not get a more lenient underwrite full stop... and if you do get a more lenient underwrite, expect to pay for that with a higher than market rate.

I will say be careful on rebates, make sure you aren't paying for them on the front end which is why I generally don't ever look to DCU (where I have consumed all sorts of products over my 20 year history with them) for a mortgage but I do for every other product.  

[Iusedtolurk]

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@Revelate wrote:

So relationship building for a mortgage is a non-seqiteur: the reason being is hardly anyone portfolios their mortgages and as such they are beholding to the underwriting rules of a third party.  Usually on this forum when we have talked about building relationships, it is for credit cards which are underwritten under an individual lender's policy which means all sorts of compensating factors can be taken into account... like Chase giving me a Freedom on recon nearly a decade ago when I made the point I ran the rest of my financial life through them for the last few years.

There are some marginal exceptions to this, I know Chase and I would expect all the big banks do this will give mortgage loan discounts (both in rate and also origination fee) at various relationship tiers (base CPC and then they had a second line at 1M in assets at Chase the last time I talked to them) which make them competitive on a conventional or even hard to beat at that second tier.

I don't know any CU that has something similar frankly but their rates are typically more aggressive anyway than the big banks for the rank and file consumer.

Unless the lender is portfoliong the loans, you will not get a more lenient underwrite full stop... and if you do get a more lenient underwrite, expect to pay for that with a higher than market rate.

I will say be careful on rebates, make sure you aren't paying for them on the front end which is why I generally don't ever look to DCU (where I have consumed all sorts of products over my 20 year history with them) for a mortgage but I do for every other product.  

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@RevelateGood to know concerning relationships and mortgages. If I do go for a mortgage with either CU I will be building a relationship by paying the mortgage thereby looking better so far as other credit products.