On this episode of Money, I’m Home, Lynne is joined by Consumers Credit Union mortgage experts David Pendley and Josh Summerfield to chat about Consumers’ newest home loan product – Lock and Shop.

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0:00:06.9 Lynne Jarman-Johnson: Money, I’m home. Hi, welcome in, I’m Lynne Jarman-Johnson with Consumers Credit Union and we’ve got everything from finance to fitness for you. So, thanks so much for joining us today. Hey, joining me today are two of our mortgage experts, the gurus that are telling us, Look at… They’re looking out into the future, they’re seeing what’s going on and they’re going to help us make sure that you get that home. Josh and David, it is just great to have you talking about the mortgage space today and what’s going on out in the industry. Josh, let’s start with you, you’re really feet on the ground, you’re helping our mortgage team every single day, how is it looking out there in the sense of what’s coming in? Is the inventory really tight? What’s going on in the market?

0:00:47.4 Josh Summerfield: Yeah, it’s been interesting, no doubt, totally different than the last couple of years as we’ve talked about in previous podcasts. But we’re starting to see a little bit of movement in the market with a little bit more coming on the market, inventory-wise, still tight, still… Every listing out there’s multiple offers, we just recently saw one that had 62 showings in one day and it’s just… We’re seeing things that we just haven’t seen before. It’s exciting though, because it’s new, it’s different, allows us to be creative and trying different ways to help our members.

0:01:20.1 LJJ: Now, speaking of creativity, David, I clearly remember just a few weeks ago when you said the words “lock and shop,” and it sounds to me that that is needed more than anything for anyone out there looking for a mortgage. David, explain what that is.

0:01:34.7 David Pendley: Yeah, I mean, when you think of being a home buyer, especially a first-time home buyer, and you’re looking at a sale price of, let’s just say $300,000, and you’re pre-approved at a rate of 3.5% and all of a sudden that house doesn’t sell for $300,000, it sells for $325,000 because it becomes a bidding war, oh, and guess what, that rate isn’t 3.5% anymore, they’ve gone up, they’re 5%, it can be very disenchanting and scary, to try to make the biggest purchase for your life and there’s a bunch of moving variables. There’s an old product back from the ’80s that’s called ‘Lock and Shop’ and we’ve dusted that product off and fit it to where it’s going to align perfectly with our members. And basically, how nice would it be if you could meet with a loan officer, they could lock in a rate for 90 days, and if the rates go lower, you get the lower rate, but you know it’s locked in for 90 days while you shop for a house. Let’s say you find a house on day 90 and you say, okay, I found my house, you lock in the rate, you can lock it in for another 60 days while you close on your house, that way you don’t have… We’re removing one of the major variables, which is obviously climbing interest rates.

0:02:53.7 LJJ: Honestly, that is something that keeps our members up at night, right? Josh, when you’re looking at the differences of payments that can happen in just a blink of an eye with interest rates going up, it sometimes can even stretch out to somebody saying, I can’t afford it now. So how cool is this?

0:03:10.2 Josh: It’s super helpful for our members, puts them at a great advantage to kind of know what they’re getting into and not having the surprise at the end of, like David mentioned, “hey, the rates are 1% higher than they were when I got pre-approved, now I can’t afford it or two, maybe can’t even qualify.” We’re hearing stories of that, thankfully we’re able to protect our members from situations just like that and be able to provide them the comfort knowing they’ve got their interest rate locked in while they’re shopping. They don’t have to worry about the market really moving on them. On the flip side, they get to take advantage if the rates happen to go down, so we’re going to give them the upside, too.

0:03:48.8 LJJ: I absolutely love that, the fact that, hey, just because you locked it doesn’t mean that if it goes lower, you can’t get that lower rate. David, quick question for you, because we keep saying our members can take advantage of this. Anyone that is listening in Michigan can call our mortgage loan officers to get this, correct? It’s something that’s open to everybody, and the moment that you apply and receive a mortgage from us, you are a member of our family.

0:04:16.1 David: Credit unions were always a mystery to me. Up until about 10 years ago, I thought I had to be a plumber, a teacher or a Navy veteran to be a member, but at Consumers Credit Union, you just need to work, live or worship in the state of Michigan, so yeah, you can be a member tomorrow or today. So, absolutely.

0:04:34.1 LJJ: So, Josh, what have you found as far as your mortgage loan officers and the processing team, because we have an absolutely star-studded team that is out on the ground, but mostly what they really do is make sure that the member is communicated with continuously. Have you found that to be even more important now?

0:04:55.2 Josh: Yeah, extremely important. Not only working with the loan officer and the borrower or the member, but also with the rest of the team, with the title company and with the realtor, we want to… Our loan officers all do a fantastic job of communicating with all parties of the transaction, making sure it goes smoothly, because we want it to be a top level of a service type of a transaction. We don’t want any question marks for the borrower. It’s a big enough thing in their life, it is probably the biggest thing in their life, obviously, and we don’t want to cause extra stress around that they don’t need and we love it. We love taking care of our members that way, we love the smiling faces at the closing table where they didn’t have a worry in the world other than just getting there and getting their keys.

0:05:40.8 LJJ: That’s awesome. David, final point. You really are watching the market very closely and watching what’s going on. Any thoughts about the next three to six, nine months?

0:05:51.5 David: Yeah, I think it’s going to be very busy. As all of this pent-up demand, all these buyers who’ve been on the sidelines, inventory is increasing by the day so there will be options. One of the benefits of increasing interest rates, I think it’s going to taper off the pricing a little bit, so I think we’re going to see a $300,000 house sell for $300,000, so I think it’s going to even that whole market. And we’re actually going to have what’s called a market time, a house is going to come on the market, it’s not going to be an auction, it’s not going to sell in 24 hours, but hopefully it’ll take two weeks or three weeks, which is really a good thing because it allows a buyer to do the necessary inspections, to take their time, to look at three or four options and not have to buy the first house. So, there’s some really good things coming out of this. So I think really busy the next two or three months, I think it’s going to be quite slow in the fall but that’s just my guess.

0:06:46.8 LJJ: Alright. Well, David, Josh, thank you again for joining us. We love these segments that help our members and anyone who’s listening get that home.

0:06:54.8 Josh: Thanks for having us.

0:06:55.4 David: Thanks, Lynne.

0:06:56.9 LJJ: Money, I’m home, thank you for joining us. If you have a topic you’d like just send it our way, we’d love to hear from those that you know about too. Hey, listen up, it’s Money, I’m home. Thank you, Jake Esselink for your production skills. I hope everyone has a great day.

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