Vice President of Mortgages Josh Summerfield joins host Lynne Jarman-Johnson to discuss all things mortgages, from zero down to PMI. Also, Money Minute expert Scott Dobson shares about the @Work program and how the team helps businesses and employees better manage their finances.

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00:00:06,437 Lynne Jarman-Johnson (LJJ): Money, I’m Home. Welcome in, I’m Lynne Jarman-Johnson with Consumers Credit Union. From finance to fitness. We do have it all. And today’s topic is on mortgages. So much to learn from zero down, to what is PMI, to making sure that we get that home for you. I’m Lynne Jarman-Johnson and don’t forget at the end, we’ve got our Money Minute Expert, so let’s jump right in.

And joining us today is Josh Summerfield. He is our vice president of mortgages.

I’ll tell you what. Zero down is so hot, and it’s something that people get so excited about. And we are—it’s out on the table again.

00:00:40,458 Josh Summerfield (JS): It is. You know, it’s a great program for us. It’s a great program to keep some dollars in our buyer … our members’ pockets as they’re going through the purchase process because, you know, they may have some other expenses that come up along the way, which typically happens when you buy a home. And now they have some funds to do that. If they don’t have to put it down for down payment.

00:00:58,336 LJJ: What does that actually mean? Like some people will say, “Oh my gosh, I’ve got to have at least 20% down.” It’s in their mind. And, all of a sudden, you’re hearing zero down. Does that mean that then your payment might be a little higher?

00:01:11,611 JS: Yeah. I mean, your payment is going to move according to your loan amount, right? So if you’re not putting as much down, your payment will be higher than as if you would have put some money down. Interest rates change a little bit from program to program. Zero down is going to be a little bit higher of an interest rate than you would have on a, you know, 20%-down conventional program or even a 5%-down conventional program. So that that changes a little bit. So, it’s just finding what’s important to you in that process.

00:01:38,528 LJJ: You know, in a very tight market, which it still is here in the Michigan market, it’s a very tight market. One of the programs that we also offer that has become extremely popular is Lock and Shop. So, you lock in your mortgage rate, and then you get to shop for that home.

00:01:55,571 JS: Yeah, we’re fortunate to have this program. So, yes, you lock in your rate while you’re getting a pre-approval done, and you can shop for up to 90 days and know you have the security of your rate is not going to go up. But the beauty of it is if rates go down, you get the lower rate once you’re able to find that contract. So, you kind of got the best of all worlds in this one.

00:02:18,853 LJJ: You know, people are so concerned about interest rates. And I remember days when there were double-digit interest rates that you just you didn’t even think about it. You bought your house at a double digit. How important is it to realize that you can refinance once rates go down?

00:02:34,362 JS: Yeah, I think it’s, you know, kind of this word we forgot all about for a while, right? “Refinances.” We haven’t seen it. You know, it’s a very limited
part of our business right now. But it’ll come back. And you’re not going to be stuck with that higher rate forever. You’re going to have many opportunities
over the coming years to refinance into something that, you know, makes a little bit more sense at the time.

00:02:54,842 LJJ:  What are you seeing in the market right now? Are some … is there a little bit of a wiggle room in the houses that are available?

00:03:01,979 JS: It’s still a seller’s market. We definitely have noticed that. That hasn’t really changed much. There are a lot of buyers out there on the streets looking, looking for homes. I think sellers are a little still hesitant to get back in the market, knowing they have to buy something, maybe at a little higher rate than what they bought their house for before. So, it hasn’t moved a ton, but we’re seeing some signs of encouragement that there’s going to be a little bit more on inventory this summer.

00:03:30,264 LJJ: And Josh, what’s the most important thing that people can do if they are a buyer and they are really looking to grab a home? Is it: patience is a virtue?

00:03:39,436 JS: Definitely got to be patient. I mean, it’s a little bit of a marathon. Not a sprint right now, as far as when you’re looking for a home. But getting that pre-approval upfront, making sure you’re ready. So, once you do find the house that you want to, you know, throw an offer in on … or sometimes it takes two or three or four or five offers to get the house that you want, make sure that pre-approval is in place. Make sure you’ve had those conversations. Use the Lock and Shop program so that way you know you’re protected against the market. That’s the key things you want to be focused on right now.

00:04:12,090 LJJ: You mentioned zero down. But there are so many other loan options out there for our members and anyone out in the community who wants to bank with Consumers. What kind of loans are there?

00:04:23,297 JS: Yeah, I mean, outside of zero down, obviously, you have your conventional stuff, you have FHA, which is—can be a little bit lower down payment option. There are rural development loans out there. We have several different other types of portfolio loan products, more niche–

00:04:37,472 LJJ: What does that mean when you say, “portfolio loan,” Josh?

00:04:40,307 JS: Yeah, so it’s a loan that’s done by Consumers Credit Union from our balance sheet, dollars that we came up with program specifically from Consumers Credit Union that we’re the investor, and we’re trying to make a loan that makes sense for our members.

00:04:55,884 LJJ: Tell me a little bit about—I’ve heard this and saw just recently on a post on social media about someone that was disappointed because they had their loan sold. What does that mean?

00:05:08,758 JS: Yeah, so, there’s different investors, right, in conventional financing. Like, we sell our conventional loans to Fannie Mae and Freddie Mac. So the loan is serviced here, but they’re funding the loan on the back side. So, there’s also selling in the in the form of servicing. And that’s probably what this person was referring to. Now they have to pay somebody else. We don’t do that here. We service our loans. But there are lenders out there that will sell their servicing. So you may write the loan with Company A, but they sell it to Company B, and now you’re paying Company B.

00:05:42,146 LJJ: And that local servicing is what makes us stand out.

00:05:45,648 JS: Yeah, we love to service our loans. We want to see our members in our in our offices. And, you know, we want to be that one-stop resource for them all throughout their financial journey.

00:05:55,087 LJJ: On the zero down … one of the things that we market is something called “no PMI.” What does that stand for?

00:06:02,025 JS: PMI stands for private mortgage insurance. And that’s traditionally something that you pay when you don’t have 20% down. On a conventional loan, that’s standard. You have to have 20% down to avoid PMI. Now, on our zero-down product, since it’s a portfolio loan, and we’re not selling it to Fannie Mae or Freddie Mac, we can kind of come up with our own terms and what makes sense for our members. And so, we don’t put private mortgage insurance on or zero down or most of our portfolio products for that matter. So there is a benefit there for the member where they don’t have that separate little line item on their monthly statement of PMI.

00:06:36,947 LJJ: Who would want to get a mortgage any place else?

00:06:39,615 JS: That’s a great question. I don’t think there’s a better place to get a mortgage than at Consumer Credit Union, especially right now in 2024.

00:06:47,253 LJJ: Thank you so much, Josh. Thank you, Lynne. Thank you for listening. And now it’s time for our Money Minute Expert

00:06:58,527 LJJ: And now it’s time for our Money Minute Expert with Scott Dobson. Hi, Scott. Scott is our @Work coordinator. Tell us a little bit about what you do and then why it’s so important in our community.

00:07:10,468 Scott Dobson (SD): My team and I go into businesses, and we help employees better manage their paycheck. Really, we really help with personal finances, but we do it from the paycheck going forward. So, we help people get to the end of their paycheck, balance their budget, increase their credit score and save for those big life purchases that they’re looking for.

00:07:28,912 LJJ: Can be life changing.

00:07:30,947 SD: Absolutely. And we go right into the businesses and do it right. It’s hard to—let’s say you get a new job, to say, “Alright, I got a new job and I want to save for a house down the road.” All these tasks that have to happen. So, we try to be there right there with the employer so we can make it super simple and easy for someone if they’re—If they need a new paycheck, if they’re getting a new direct deposit, we can help with that. Make it super simple and easy.

00:07:51,593 LJJ: Well, thank you very much, Scott. And thank you so much for listening here on Money, I’m Home.

Don’t forget the @Work program is complimentary. Head to our business services page, and you’re going to be able to find a link that will get you right to us, so you can connect and say, “Hey, I want my employee …” or you want to tell your employer, “I really want @Work with Consumers Credit Union.”

00:08:18,076 LJJ: Wow. What a show. I’ll tell you what: jam packed with mortgage information. And find out more at our website: ConsumersCU.org where you can find a loan officer and find all the tools that you need to make sure you can get the home of your dreams.

Thanks so much for joining us. Money, I’m Home. I’m Lynne Jarman-Johnson with Consumers Credit Union.