Many people think of the homebuying process as: Find house, find lender, get mortgage, buy house. The truth is, teaming up with a mortgage lender at the very beginning of the process can make it all go much more smoothly. The right mortgage lender can help you determine a budget, get you preapproved, and answer questions at any time — before, during, or after your purchase.

Finding a lender you’re comfortable with will make your homebuying journey easier and more enjoyable. Here are six tips for choosing yours.

1. Choose a full-service financial institution.

A full-service financial institution like a bank or credit union offers a lot of advantages over a mortgage-only or online lender. For instance, a full-service lender can see your entire financial picture and help you make moves that will make your home purchase goal a reality (such as simplifying debt and improving your credit score). A full-service bank or credit union also offers other products you may need later, like a home equity loan for home improvements. Plus, you can set up automatic payments, or transfer from your personal accounts to the same institution easily through their online and mobile apps. Finally, a full-service institution like Michigan Schools and Government Credit Union has physical locations where you can meet face-to-face with a loan officer, ask questions, and establish a relationship. MSGCU has 22 branch office locations in Southeast Michigan, and we take pride in establishing long-term relationships with our members.

2. Look for a local lender.

A local lender knows the area and its real estate market. When you call to ask a question, you will talk to your local consultant and not a national call center. MSGCU has strong ties to all the communities we serve, both through our membership and community outreach programs. And when you get a mortgage through MSGCU, your relationship stays local: we service it for the life of your loan.

3. Find a lender customers recommend.

Do a little research on potential mortgage lenders. Do you know anyone who got their mortgage from them and can recommend the experience? Most new MSGCU members come from referrals, and MSGCU’s referral program rewards both parties^†. Plus, MSGCU has maintained an average member satisfaction rating of 97% for 20 years running, which is important when you’re making one of the largest purchases of your lifetime.

4. Seek out personalized guidance.

When you talk to a potential lender, do they ask questions about your wants and needs? Do they get to know you and your financial situation, or simply follow a form? Your lender should take the time to make sure your mortgage fits your unique needs and lifestyle.

5. Look for market-leading rates and low fees.

Make sure you’re getting the most value on your mortgage. Some lenders lure borrowers in with an ultra-low rate and then charge extra fees and points on the loan, which makes the actual interest rate much higher than it looks. MSGCU offers market-leading rates on a variety of loans and mortgages. And if the rate drops more than 0.25% between the time you lock in your rate and the closing date, you can take advantage of the lower rate (once during the lock-in period). MSGCU charges no application fees, and if you apply for your mortgage by September 30, 2024, your processing will be just $99,* a savings of more than $600. The more you save, the more house you can afford -- or the more money you can keep in your pocket.

6. Seek out special features that make house hunting easier.

Preapproval and rate lock features can give you greater confidence going into your search. MSGCU offers our True Preapproval and Rate Lock and Shop. Rate Lock and Shop allows you to lock in a mortgage rate for up to 90 days, so you don’t have to worry about rates rising while you house hunt. And MSGCU’s True Preapproval is more than a prequalification; it looks at your full financial picture, including your credit report, so you can be confident in shopping for a home you can actually afford.

Choosing the right mortgage

Once you’ve chosen the right lender, they can guide you toward the right mortgage. Here’s a quick overview of the different types you might consider.

• Fixed-rate mortgage: The most common type of mortgage. The interest rate stays the same over the entire payment term (usually 15, 25 or 30 years). Learn more.
• Adjustable-rate mortgage (ARM): This mortgage has an interest rate that stays the same for an introductory period (five to seven years with MSGCU), then adjusts afterward. The initial rate is usually lower than with a fixed rate mortgage. Later, the rate can adjust up or down, depending on the market; MSGCU protects borrowers by capping the rate. If you expect to move on to another house within this period, an ARM could be a good option for you. Learn more.
• FHA mortgage: These mortgages are backed by the government and allow buyers with smaller down payments or lower credit scores to achieve home ownership. Learn more.
• 0% down mortgage: MSGCU offers a special 0% down mortgage for first-time home buyers or anyone who has not owned property in the last three years. Learn more.

Still nervous about the homebuying experience? That’s understandable. A great way to gain more confidence is to take advantage of the free Homebuyers Workshop offered by MSGCU. The Workshop is available as an online or in-person course, and once you’ve completed it, you’ll receive a $375° coupon toward a home appraisal (the amount will be deducted from your closing costs).

The workshop will teach you about budgeting for your home, preapprovals, getting a home inspection, what happens at closing, and more. It’s a popular session and a great way to get all your questions answered with an MSGCU mortgage expert. You can also learn more about the homebuying process in this blog from MSGCU.

If you kick off your house hunt by finding the right mortgage lender, you can pave the way for a smoother homebuying journey — and save yourself some money, too.

Michigan Schools and Government Credit Union can help you reach your homebuying goals. Find a friendly mortgage consultant, call us at (866) 674-2848, or stop by one of our 22 convenient branch offices.

*$99 mortgage processing fee offer available for mortgages loans originated and disclosed between 5/1/2024 and 12/31/2024 and saves $646 on mortgage processing when you obtain a mortgage from MSGCU. Homebuyers are responsible for any third-party closing costs including but not limited to home appraisal, home inspection, title, tax, and insurance. A loan amount of $200,000 at an interest rate of 7.000% and an Annual Percentage Rate (APR) of 7.039% has a payment of $1,330.60 with 0 points due at closing. The payment does not include property taxes or insurances, the actual payment will be higher.

°Attend our free Homebuyers Workshop and receive a coupon worth up to $375 to apply toward a residential real estate appraisal when you obtain a mortgage from MSGCU. The coupon credit will be applied at the time of closing.

^†You must be a legal resident of the United States of America, at least 16 years old, and a member of MSGCU to participate in the Program. Referrals made to existing members of MSGCU are invalid. By making a valid referral that is completed by a Friend in accordance with the Program Terms, you and the Friend will each receive a cash reward as follows: $5 for a new MSGCU membership which is established by the Friend and remains in good standing for a period of at least 60 days; $25 for an approved and funded Auto, RV, Boat or Powersport loan of $5,000 or more applied for by the Friend within 10 days of membership open date; $25 for a new MSGCU VISA credit card which the Friend must apply for within 10 days of membership open date and be approved for within 30 days of application date; $100 for an approved and funded mortgage loan applied for by the Friend and funded within 180 days of membership open date; $25 for a new checking account opened by the Friend and funded with $25 or more within 10 days of membership open date. The Friend will receive an additional $25 reward if they make 10 debit card transactions of $10 or more via the new checking account within 60 days, or they receive a direct deposit of $100 or more into the account within 60 days. Only one reward per reward type is available, for each Friend referred, subject to a maximum of $1,500 in cash rewards per calendar year. Rewards will be automatically deposited into your oldest existing MSGCU primary share account two business days following confirmation by MSGCU that the referral has been made in full compliance with the Program Terms. Reward cash payments are considered interest and annual payments totaling $600 and above will be reported on IRS Form 1099-MISC, to federal, state, and local tax authorities, if required by applicable law. You are responsible for any taxes due. For full terms and conditions, visit https://www.msgcu.org/disclosures-and-fees.

Category: Finance