Tag: Home Lending

Why Lenders Matter

Posted on by Living Room Realty

Working with buyers, a conversation that I have often is why is it so important to work with a good local lender. Buyers are often under the assumption that who the lender is shouldn’t matter and that’s just not the case.

What I often explain is that someone may go online and be wooed by the promise of low interest rates with a national bank or lender. Who doesn’t love low interest rates? What they don’t realize is that the rate is not everything. In this competitive market, a buyer also wants to consider the fees. They also want to consider that these lenders may have a local broker, but the processor or underwriter is very likely not local and doesn’t understand how to close the deal on time. If a deal cannot close on time, then the deal may not close. Sellers can extend the deal, but they aren’t required. Furthermore, as a listing agent, when I see a preapproval letter from one of these national companies, I know that the buyer has likely not been vetted and that the preapproval is not worth the paper it’s printed on.
I work with a few local lenders who do a fantastic job staying on top of the deal. One such mortgage broker is Jen Odell with Mortgage Express. I met Jen on a deal a few years ago and she’s been one of my top must have mortgage brokers ever since. One of the things that I love about working with Jen is that I know that she is going to gather a full file on my clients. When I receive a pre-approval from Jen, she has already gathered documents from my clients that her underwriter may request down the line. This makes for a smoother transaction and also helps get my client’s offer accepted.
Mortgage Express is a local company…. Jen works closely with her processor and underwriter who are also local. She’s not emailing someone out of state who does’nt understand our market and our timelines. Jen works holidays and weekends and if she’s not available when I call, she always texts me back with a time estimate of when I’ll hear back from her. This is huge for me.
National lenders may say that they can close a deal in less than 30 days, but if you talk to any realtor in town, they will likely have horror stories of deals that dragged on for months or that fell apart. If you’re already under contract, you cannot switch lenders without consent from the seller and there’s no guarantee that will happen.
So when I tell you that the lender does matter, please know that this is based on my experience as an experienced realtor. I want to ensure you are confident in the investment you’ve made in your home and will recommend the mortgage brokers who will find the right home financing solution for you and close on time. Anyone I recommend cares about getting you to the finish line.

The Value of an Excellent Lender

Posted on by Sean Patrick O'Feery

The importance of a lender is not truly felt until you are in the process of the purchase. There are so many options for a prospective buyer to shop from, some great and some not so great. We, as Real Estate agents, have an opportunity to offer referrals for a trusted lender, but it is ultimately the buyer’s choice who they will work with.

 

In this short blog post I want to point out a couple of things to think about, as a buyer, to help you find the right lender or lending institution for you:

 

Does your choice answer the phone on a weekend or after 5:00?

  • I can tell you, from personal experience, that Real Estate happens at all hours, especially the weekends and evenings. Getting timely information or a revised pre-approval letter when you need it can be the difference between getting your dream home and getting your offer rejected.

Does your lender keep your timeline in mind and have experience with the local market?

  • A Real Estate purchase or sale is a list of terms and timeframes. The best lenders are looking ahead on all timeframes to set up for a smooth sale. They are communicating with you to let you know when you should be considering a decision that will affect your timeline. Namely, on when to order the appraisal.  A thoughtful and active lender will know if appraisal reports are taken longer than normal in your area.

Does your choice of lender have a track record of making it easy for you as a buyer and did they come to you from a referral?

  • As an Agent who works by referral, I cannot understate the value in having a first hand referral of the professionals you choose to work with. A lender is the third member of your team: It is you- the buyer, me-the agent and your lender that all work to make a successful sale. Choose wisely!

How do the rates compare?

  • I get it! The cost of a loan is important and the interest rate of your loan is important but if you can get the same cost and rate from a proven performer with a stellar reputation, take the time to get pre-approved with them, it could save you some headaches down the road.

If you’ve read this far, I’ll bet you can imagine that this blog is inspired by the wonderful lenders I work with and some of the others that have struggled.

 

Shout out to my top three:

Aaron Nawrocki with Capital M

Gary Boyer with Directors Mortgage

And JJ Lee Kwai with Two Rivers Mortgage

 

You guys are the best!

If you are just getting started or at any stage of looking for your home give me a call, I’m with you for every step of the way toward your goals.

I pride my practice on being full service from before the beginning well past the end!

 

The Market in Focus: Higher Portland Home Prices, Smaller Down Payments

Posted on by Aryne + Dulcinea

By Aaron Nawrocki, Capital M Lending

Portland home prices have been climbing consistently this decade, and there’s a lot of “bubble” talk these days. If you had to name the two defining changes in the Portland mortgage market over the last eight years, they would be higher sales prices and smaller down payments. Portland has traditionally had a strong real estate market, even in downturns, but Portland down payment amounts are decreasing. Historically, sales prices and loan amounts rose in lockstep. As Portlanders moved up, they took the equity from their sale and put it down on the new purchase. Portland incomes have traditionally been lower than other places on the west coast and Portlanders needed lower monthly payments. Larger down payments kept the monthly payment affordable and limited the growth in prices.

Now that Portland is the it city on the west coast, the connection between down payment and sales price has changed. More buyers are moving here from other locations, bringing their well-paying jobs with them. They’re younger, make more money, can afford higher monthly mortgage payments, and are putting less down. Accelerating the shifting dynamic is the increasing availability of small down payments paired with large loan amount mortgage. This trend has pundits worried we may be headed for trouble. Small down payments mean banks have a smaller cushion in case of default, and a moderate price decrease would leave more homeowners under water. That makes defaults more likely, as homeowners are less likely to continue making mortgage payments when they owe more than their home is worth. In the last recession, many at-risk homeowners elected to stop making payments, and the flood of foreclosures created a downward market spiral. It’s understandable that analysts would make the connection between 2006’s peak and the recent price runup.

The rate of price increase is similar – the early 2000s and recent years have seen strong price growth, which raises concerns of a correction. However, while the price increase is similar, there are two factors which make a bubble less likely.

  • Rents have risen along with sales prices. That makes elective defaults less attractive. In 2009, a homeowner might abandon their home and its $2,000 per month payment and rent a similar home for $1,500. Today’s housing market is different – rents and monthly mortgage payments are similar. Therefore, homeowners typically can’t reduce their housing expense by opting to rent.
  • Mortgage qualification is dramatically different. The biggest change is the absolute requirement to verify the buyer has the means to repay the mortgage note. In 2006, buyers could easily get a mortgage to buy a new home without having to document they could afford the payment. There was no validation by the bank, allowing many buyers to make speculative purchases. As soon as the market turned even slightly, many of these buyers could not make their monthly payments and allowed their homes to go into foreclosure. While a price decline will increase defaults in today’s housing market, ensuring the monthly payment is truly affordable will mitigate this effect.

There’s an old saying that whatever goes up, must come down. That’s as true today as ever. The rapid rise in Portland home prices definitely feels evocative of the early 2000s and brings up the specter of a bubble. Prices will eventually decrease, of course, but unfortunately no one knows when. The good news is that the structural and mortgage changes in the real estate market will likely dampen the severity of the market’s ebbs and flows. With the strong inflow of well-qualified buyers in the Portland market, it appears that Portland home prices are set for a period of stable growth.

 

Aaron Nawrocki has over 20 years of direct experience overseeing mortgage and loan processes, working to provide clients the market insight and lending expertise required to make informed decisions.

 

About Us:
Over the course of their professional partnership, Aryne + Dulcinea have helped over 200 clients prosper in their new lives. During this time, they have prided themselves in their top-notch selling abilities, with homes outperforming market standards, consistently exceeding list price while most of their listings sell in under 7 days. Whether you’re looking to buy or sell, Aryne & Dulcinea will work in collaboration to guide you in investing in your future and reaching your real estate goals.