Morning Mix


MSUFCU explains how to pick the right mortgage for your budget

Posted at 12:12 PM, Jul 15, 2020
and last updated 2020-07-15 12:12:51-04

With summer in full swing, you may be ready to buy a home — or are at least thinking about it.

MSUFCU Chief Marketing Officer Deidre Davis came on the show to discuss the types of mortgage loans and how to determine what is right for you.

What is the difference between a conventional mortgage and an FHA mortgage? Is one better than the other?

Each type of mortgage is designed for a different purpose.

To qualify for a conventional loan, you usually need to have a higher credit score, lower debt-to-income ratio and higher down payment than an FHA loan would require. An FHA loan is a government-backed home loan insured by the Federal Housing Administration. It has less-restrictive qualifications compared to a conventional loan.

Ultimately, determining which loan is right for you involves understanding your financial situation and needs.

How do you know which mortgage term is right for you — 30 years, 15 years or some other length?

That depends on your budget and financial goals. For example, a 30-year mortgage often is the best option for people who want lower monthly payments, even if that means paying more in interest over the life of the loan. Others may want to minimize the amount of interest they pay even though they would have a larger monthly payment. If you can afford a larger monthly payment, the 15-year mortgage could be a better choice to save money in interest.

When is the right time to apply for a mortgage?

You should first know your budget, the amount of existing debt you have, and your credit score. When applying for a mortgage, lenders will consider these factors — along with your income, debt-to-income ratio, and sometimes assets — to determine the mortgage rate you’ll be offered. High-risk borrowers - those with low credit scores and high debt-to-income ratios — usually receive higher interest rates to offset the lender’s exposure and vice versa. Those with stronger credit profiles typically receive lower mortgage rates.

MSUFCU members can apply for a mortgage conveniently through the MSUFCU Mobile app. They offer several types of home loans that include a:

· 90-day preapproval rate lock

· Down payment as low as 3%

· Free FICO® Score (credit score)

Loans for buying, building, and refinancing homes area available, including our first-time homebuyers option that features $500 off closing costs and a free gift. They also have a mortgage calculator available on our website so you can input your information and potential loan rate and see your approximate monthly payment.

To learn more, visit