Finance
Iowa's credit union mortgage lending differs from bank lending primarily in that:
ACredit unions are not regulated
BCredit unions are member-owned cooperatives, often offering competitive rates, but are subject to the same federal lending laws as banks✓ Correct
CCredit unions can only make agricultural loans in Iowa
DCredit unions do not need to comply with RESPA
Explanation
Iowa credit unions are member-owned financial cooperatives often offering competitive mortgage rates and fees. They are subject to the same federal lending laws (TILA, RESPA, ECOA, HMDA) as commercial banks, regulated by the Iowa Division of Credit Unions and/or NCUA.
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Key Terms to Know
Adjustable-Rate Mortgage (ARM)
A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
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