Editorial Review

N.C. State Employees’ Credit Union Mortgage Review 2020

Good for: North Carolina government employees and other eligible borrowers with little saved for a down payment or who can afford to repay a mortgage in 20 years or less.

Kate WoodJune 30, 2020

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Our Take

4.0

NerdWallet rating 

The bottom line: North Carolina State Employees' Credit Union offers 20-year conventional loans on favorable terms and displays mortgage rates upfront, but it lags in online capabilities.

State Employees' Credit Union

State Employees' Credit Union: NMLS#430055

National / Regional

Regional

Min. Down Payment

0%

Loan Types and Products

Purchase, Refinance, Home Equity, Jumbo, Fixed, Adjustable

Pros & Cons

Pros

  • No private mortgage insurance required, even with a down payment less than 20%.

  • First-time home buyers may borrow up to $400,000 with no down payment required.

  • No fees for applications or credit reports.

  • Offers mortgage credit certificate and down payment assistance programs.

Cons

  • Does not offer 30-year fixed-rate mortgages.

  • Does not have government-backed loan options.

  • Membership eligibility is limited, and loans are available only for properties located in Georgia, North Carolina, South Carolina, Tennessee and Virginia.

  • Does not offer a full online loan application.

Compare to Other Lenders

New American Funding
NASB
Min. Credit Score

700

Min. Credit Score

620

Min. Down Payment

3%

Min. Down Payment

3%

National / Regional

National

National / Regional

N/A

Loan Types and Products

Purchase, Refinance, Home Equity, Reverse, Jumbo, Fixed, Adjustable, FHA, VA, USDA

Loan Types and Products

Purchase, Refinance, Home Equity, Jumbo, Fixed, Adjustable, FHA, VA

Full Review

Due to the coronavirus pandemic, getting a mortgage may be a bit of a challenge. Lenders are dealing with high loan demand and staffing issues that may slow down the process. Also, some lenders have increased their fees or temporarily suspended certain loan products. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

N.C. State Employees' Credit Union at a glance

If you’re eligible for membership, SECU offers some excellent perks — in particular, no-down-payment loans for first-time home buyers, as well as closing cost assistance. SECU does not offer 30-year fixed mortgages or government-backed loans, though it does have a few specialty loan options. It's easy to view sample rates and fee details on its website, but its online mortgage application capabilities are limited.

Here's a breakdown of NC SECU's overall rating:

  • Variety of loan types: 5 of 5 stars

  • Variety of loan products: 3 of 5 stars

  • Online convenience: 2 of 5 stars

  • Rates and fees: 3.5 of 5 stars

  • Rate transparency: 5 of 5 stars

N.C. SECU mortgage loan types and products

North Carolina State Employees’ Credit Union, or SECU, is the largest mortgage lender in North Carolina by loan volume as of 2019, the latest data available. SECU, whose membership is primarily composed of state and public school employees and their families, has over $42 billion in assets and more than 260 branch locations.

SECU’s mortgage lineup is fairly solid, but it has a few quirks. Home loans offered include 10-, 15-, or 20-year fixed-rate mortgages; 5/5 ARMs; home equity lines of credit (HELOC); construction mortgages; historic preservation mortgages and manufactured home mortgages.

What's notably missing? SECU does not offer conventional 30-year fixed-rate mortgages or government-backed loans, like FHA and VA loans.

For SECU, not offering the traditional 30-year fixed-rate mortgage is a business decision. "As SECU currently maintains all of its mortgage loans in portfolio, we prefer to avoid the long-term interest rate risk exposure of 30-year fixed-rate mortgages," says Mark Coburn, senior vice president of lending development.

Nerd tip: Portfolio mortgages are serviced by the original lender rather than being bundled and sold to government-sponsored entities like Fannie Mae and Freddie Mac. When lenders keep loans on their own books ("in their portfolio"), they can often be more flexible on loan amounts, debt-to-income ratios and loan-to-value ratios.

SECU does offer jumbo loans but doesn’t call them that on its website. That’s because SECU does not have separate underwriting standards for loans over the Federal Housing Finance Agency’s county limit, as most lenders do. Individual members can get a home loan up to $1 million.

Low-down-payment borrowers will appreciate this: SECU does not require private mortgage insurance on conventional loans with down payments of less than 20%.

SECU offers an adjustable-rate First Time Homebuyer's Mortgage of up to $400,000 with no down payment required. Borrowers may also qualify for up to $2,000 to apply to closing costs.

A separate grant program, offered in association with the Federal Home Loan Bank of Atlanta (FHLBA), provides grants up to $5,000 to help with closing costs and the down payment. The assistance is a second mortgage that doesn’t have to be repaid, subject to borrower eligibility.

N.C. SECU mortgage online convenience

Like many credit unions, SECU’s website isn’t flashy or sporting the latest technology. An online loan application is not readily apparent, but it’s available once you’re granted member access.

Still, that application just lets you make an initial inquiry. You'll actually work through your mortgage application online with a dedicated loan officer. Most online conveniences — like document upload and automated loan tracking — are not available, though the lender says you can electronically sign documents.

SECU works to make up for  its online shortcomings with customer service offerings like 24/7 member service via a toll-free support line. It also has a massive number of branch offices, with more than 260 across North Carolina.

N.C. SECU mortgage rates and fees

One of the most important considerations when choosing a mortgage lender is understanding what the loan will cost. In order to provide consumers with a general sense of what a lender might charge, NerdWallet scores lenders on two factors regarding fees and mortgage rates:

  • A lender's average origination fee compared with the median of all lenders reporting under the Home Mortgage Disclosure Act. N.C. State Employees' Credit Union earns 3 out of 5 stars on this factor.

  • A lender's offered mortgage rates compared with the best available on comparable loans. N.C. SECU earns 4 out of 5 stars on this factor.

Borrowers should consider the balance between lender fees and mortgage rates. While it's not always the case, paying upfront fees can lower your mortgage interest rate. Some lenders will charge higher upfront fees to lower their advertised interest rate and make it more attractive. Some lenders just charge higher upfront fees.

You can decide to buy discount points — a fee paid with your closing costs — to reduce your mortgage rate.

Deciding whether you want to pay higher upfront fees is a matter of considering how long you plan to live in your home and how much cash you have to apply toward closing costs when you sign the loan paperwork.

N.C. SECU mortgage rate transparency

SECU does a good job of providing interest rates. Each mortgage product page not only explains how the loan works but offers current interest rates for various loan terms. Coburn says no rate estimation tools are necessary to determine your "custom" rate — the interest rates you see on the website are the rates members pay on each loan product, regardless of credit score.

As for fees, SECU levies a 0.75% loan origination charge, capped at $1,500. It does not charge application fees.

More from NerdWallet

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.