Michigan Mortgage Lender: How Do I Find The Right Lender?

The median home price in Michigan sits at $154,900, $100,000 cheaper than the national median. With home prices almost breaking into the top 10 cheapest in the country, you’re likely to find an affordable first home in Michigan. However, you’ll also need a good mortgage lender to take advantage of these low prices.

Finding the right mortgage service provider is one of the key big decisions in buying a new home. The right lender allows you to get the most competitive rates and receive excellent customer service.

Read on for a complete guide on how to look for the best Michigan mortgage lenders. We also provide our top five mortgage lenders in the state!

Choosing A Michigan Mortgage Lender

If you’re looking to research and compare between lenders yourself, here are the five criteria we used to choose the best mortgage lenders in Michigan:

Mortgage Loan Types Offered

There are a variety of loan types that cater to different kinds of homebuyers. To get the best value out of your mortgage, you should pick the mortgage product that can fulfill your needs.

Here are some of the most common home loan types in the market today.

Conforming mortgages: These are mortgages valued under Michigan’s mortgage lending limits of $548,250.
Jumbo mortgages: If you’re looking to buy higher-valued homes, you can get a jumbo mortgage with a higher loan amount. It allows you to exceed local lending limits but features higher mortgage rates.
Fixed-rate mortgages: True to their name, these conventional loans have unchanging interest rates regardless of market rates. Their stability makes them great for first-time homeowners.
Adjustable-rate mortgages (ARMs): Adjustable mortgages feature rates that readjust annually. They often feature an initial period of fixed interest rates that last between 3 and 10 years.
Government loans: These loans are usually sponsored by one of three organizations: the Federal Housing Authority (FHA), the U.S. Department of Agriculture (USDA), and the Department of Veterans Affairs (VA). They offer low mortgage rates and reduced down payment requirements to qualifying consumers. USDA loans even allow you to skip private mortgage insurance.
Mortgage refinance (refi): Taking out a refi entails obtaining a new home loan to pay for your current one. Refis are taken to save money, usually by changing loan terms or securing lower refinance rates.
Home equity lines of credit (HELOC): This home equity loan provides you with a source of funds by using your home as collateral.

Affordability

Michigan mortgage rates are in constant flux and can change depending on your financial circumstances. Instead, we measure a mortgage lender’s affordability by examining how easy it is to qualify for their loan offerings.

Here are our criteria:

Minimum credit score: Lenders impose a minimum FICO score requirement to ensure you can pay debts on time. Most lenders want to see a minimum score of 620, but some may allow you to qualify with lower scores. Others will look at alternative credit history, benefitting those with low or no credit scores.
Minimum down payment: Most mortgage lenders require 20% down payments. However, some lenders may allow you to qualify with 3% down payments but require you to get mortgage insurance.
Closing costs: All fees incurred during your mortgage process are bundled into your closing costs, which can cost up to 5% of your total loan amount. Some lenders waive these fees by folding these costs into your home loan payments.
Homebuyer assistance programs: Most states have a housing authority that offers assistance programs in the form of down payment assistance and closing cost grants. While most are meant for first-time homebuyers, the state may also have low down payment options for repeat homebuyers.

Application Process

An easy application process helps consumers have a better mortgage lending experience. We use three factors to measure the ease of a lender’s application process:

Availability of online applications: Most mortgage lenders today are expected to provide a way to apply online. Online applications help consumers who have limited access to branch offices or otherwise can’t apply directly with a home loan officer.
Rate transparency: Mortgage rate estimates help potential consumers rate shop and compare between lenders. Some lenders display rate estimates directly on the website, while others may require you to talk to a loan officer first.
Length of the application process: Your mortgage generally takes up to a few weeks to close. However, there are cases where your loan may take several months to finalize. Check with your loan officer to ensure your mortgage application can be finalized on time for your home purchase.

Customer Service And Ratings

You invest a lot of money into your mortgage loan, so you’ll want a lender with good customer service in case a problem arises. For a quantified look at the customer service quality of mortgage lenders, we turn to two organizations: the Better Business Bureau and J.D. Power.

The Better Business Bureau rates the trustworthiness of companies with a letter grade ranging from F to A+. Its rating comes from several factors such as how the company handles customer complaints and the transparency of its business practices.

J.D. Power rates companies based on their customer satisfaction through consumer surveys. It publishes an annual study that also awards the best-scoring companies.

Access To Services

The number of states a lender serves is essential because if a lender doesn’t service Michigan, you have to choose another lender. Meanwhile, the number of offices a lender operates across multiple states is important because some people prefer applying for a mortgage with an in-person loan officer.

The Best Michigan Mortgage Lenders

With the five aforementioned criteria in mind, we’ve chosen our top five Michigan mortgage lenders. These five lenders are all the best at one aspect of the mortgage lending process, so pick whichever one can best fulfill your home purchase.

Before we break down each of these mortgage lenders in detail, here is a quick look at some key details.

Lender	Minimum FICO Score	Minimum Down Payment	BBB Rating	JD Power Rating	Best For
Rocket Mortgage by Quicken Loans	620 (580 for FHA)	3%	A+	883	Online convenience
New American Funding	620	3%	A+	N/A	Nontraditional credit
Fairway Independent	620	3%	A+	865	Mortgage variety
Veterans United	640	0%	A+	873	VA loan
Chase	620	3%	A+	860	Closing cost benefits

1. Rocket Mortgage By Quicken Loans – Best Online Service

First place in JD Power’s 2020 study

Loan products offered:

Fixed-rate loans
ARMs
Jumbo loans
FHA & VA loans
Mortgage refinance loans

Mortgage giant Quicken Loans’ online lending arm offers fast and easy applications that only take half an hour to complete. In addition to tutorial videos and guidance throughout the website, you can also take advantage of its one-click customer support to talk to a loan officer. Once you qualify for a loan, you can also use the site to manage your loan payments.

However, if you’re a more traditional borrower that wants to talk to loan officers in person, Rocket may not be the best choice – they have no physical offices.

Lender availability: Rocket Mortgage by Quicken Loans offers exclusively online mortgage loans nationwide.

2. New American Funding – Best For Nontraditional Credit

Loan products offered:

Fixed-rate loans
ARMs
Jumbo loans
Government-backed loans
Mortgage refinancing
Home equity loans

Most lenders use your credit score as your primary determinant of qualification. However, that’s not the case with New American Funding. It examines your applications manually, increasing your chances of getting approved. This makes getting a home loan easier for people who have nontraditional credit, like freelancers and people with spotty employment history.

Lender availability: New American Funding services loans nationwide through its site and 200 branch offices in 49 states.

3. Fairway Independent Mortgage – Best Loan Selection

Loan products offered:

Fixed-rate loans
ARMs
Jumbo loans
Government-backed loans
Mortgage refinancing
Home equity loans

Fairway’s wide variety of mortgage products mean there’s something for all kinds of consumers. In addition to the usual conventional and government home purchase loans, this mortgage lender also offers home improvement loan options and HELOCs.

However, you may have a tougher time when getting rate estimates from Fairway. It doesn’t post sample rates, so you need to talk to a loan officer to get rate estimates.

Lender availability: Fairway is licensed to originate mortgages nationwide and operates over 700 branches.

4. Veterans United – Best For VA Mortgage

Loan products offered:

Fixed-rate loans
ARMs
Jumbo loans
Government-backed loans
Mortgage refinancing

As the largest VA lender in the country, Veterans United is one of the foremost names in VA lending. In addition to VA loans, it also provides military customers with other government and conventional loans!

While it only operates offices in 18 states, you can apply for a Veterans United loan by phone or online. If you have a limited credit history, you can use your phone bills or rent payments to get approved for Veterans United’s loan offerings.

Lender availability: Veterans United services loans nationwide, with branches in 18 states.

5. Chase – Best Closing Benefits

Loan products offered:

Fixed-rate loans
ARMs
Jumbo loans
VA & FHA loans
Mortgage refinancing
Home equity loans

Getting mortgages from major banking company Chase allows you to qualify for several closing cost benefits. DreaMaker customers may be eligible for a closing cost grant worth $5,000 when buying homes in select areas, plus another $500 for completing its homebuyer education course.

Moreover, if you’re already banking with Chase, you may be eligible for a fee discount as well as an on-time closing guarantee. If your loan takes too long to close, you’ll receive $2,500 for your closing costs.

Lender availability: Chase offers mortgages nationwide, but may not have loan officers in every state.

Closing Thoughts

With prices considerably below the national median, it’s easier to find an affordable home in Michigan than in most states. When you do find a reasonably-priced Michigan home, you’ll need a good mortgage lender to get the best deals.

For more home loan resources, information, and advice about home buying in Michigan, Wesley Mortgage, LLC is here for you! Contact our professional team to receive guidance through the mortgage process and make your dream Michigan home come true!