Building societies are member-owned financial institutions that offer banking and financial services, with a focus on mortgages and savings accounts. They have no shareholders, allowing profits to be retained for members, and are regulated by a governing board. They offer better chances of obtaining a mortgage than banks and finance companies.
Building societies are financial institutions that offer banking and other financial services, but are owned by the members of the society. Most commonly identified with nations like the United Kingdom and Australia, a building society is considered the equivalent of a savings and loan association in the United States. This type of institution offers several benefits that make the partnership very attractive to a number of consumers.
One of the most beneficial aspects of the building society is that, unlike banks and other types of financial institutions, there are no shareholders. This means that there are no dividends to be paid to holders of shares in the company. Since members own the partnership, the profits generated are retained within the structure of the institution, and are readily available to members for such important transactions as mortgages and retirement savings.
Another attractive element of the building society is that it focuses primarily on mortgages and savings accounts. While other financial services are offered by different building societies, efforts to offer the best possible interest rates on different savings accounts, as well as provide the most competitive rates for fixed and variable rate mortgages, are of special interest. This attention to core functions often allows companies to be early adopters in anticipating market trends and using those predictions to their best advantage before banks and others have the opportunity to do so.
People often choose to become members of a building society because the chances of getting a mortgage are often much better than with banks and finance companies. In economic times when banks may be unwilling to issue mortgages to anyone who does not have impeccable credit, a building society is more likely to take a close look at the individual’s circumstances and seek to work with the prospective buyer. Although building societies do not offer their members guaranteed approval for mortgages, they do represent a more likely route to financing for many people.
Although a building society is not a bank, that does not mean that the institution is not regulated. In countries where partnerships are established, there is usually some type of regulatory board that ensures that each building partnership operating within the nation’s borders complies with basic financial laws and regulations. Failure to do so can result in heavy fines and the possible suspension of the right to do business within that country. In the United Kingdom, the Building Societies Commission is one of the organizations that oversees the operation of building societies within that nation.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
