Competing for Purchase Money Mortgages

Nationally, credit unions have become a much more active participant in the first mortgage business and increased their market share of closed first-mortgage loans from the traditionally insignificant 2% to an attention grabbing 8% in the second half of last year. Interest rates have remained at historic lows the past several years and because of this, credit union first-mortgage loan volume grew dramatically. However, this increase can be directly tied to refinances. 

We have heard and read the predictions that refinances will decrease. But credit unions have not experienced a dramatic reduction in refinance business and have seen a recent uptick in purchase applications. As anyone in mortgage lending for more than 10 years knows, the evolution in first-mortgage business from almost completely refinances to purchase money is inevitable.