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Monday, June 29, 2020

Mortgage Execs Share Insights

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Buying a new home or making improvements eased with local lenders

The COVID-19 pandemic has changed the way many of us work, entertain ourselves and interact with the world around us. We have spent months stay at home. If all that time stuck inside the same four walls has you considering a new house, or maybe just some updates around your existing home, now might be a great time to take action.

Ashley Brint, vice president and mortgage production manager at Regions Mortgage, and Rocky Maddox, vice president of Litton Mortgage, answered some questions about navigating the current housing market.

Question: In our post-COVID economy, what has changed in the process of acquiring a mortgage?

Ashley Brint: At Regions Mortgage, we have had limited changes to our products. But we are beginning to see some changes from the national investors, especially around verifying the stability of selfemployed incomes. All in all, we are mostly business as usual.

Rocky Maddox: The basic application process and closing/ funding of a mortgage loan remains business as usual. The biggest changes have been in the way the lending world has had to respond to the demand of people processing, closing and funding from home in many instances. In our local market, we were able to very quickly assist all of our staff in creating and/or fully equipping home office environments to keep our clients moving swiftly to the closing table. Many parts of the industry have been impacted, causing everyone to work harder, but also hopefully smarter to keep the client experience top of mind. There is no question changing the industry on a dime has been taxing internally, but keeping our customers first place has driven us at Litton Mortgage, and the industry at large, to meet the necessary challenges head on.

Q: If the pandemic has caused me financial hardship, are programs available to help secure a mortgage?

Brint: Yes, most servicers have set up payment deferrals and forbearance programs to help borrowers get through these hard times.

Maddox: Specific to securing a mortgage, it is imperative to work with a local, commonsense lender that can take the circumstances of the individual or family story and show what life was like before the pandemic, and how the recovery during this time has prepared them for the new home. When a story makes sense, it makes finding a lending product possible. But I must stress the importance of a local partner in lending to negotiate all of the questions that must be addressed. We are here for you to assist in these challenges.

Q: What is the anticipated trend for interest rates?

Brint: Currently, rate experts like the Mortgage Bankers Association are projecting continued low rates into 2021.

Maddox: Although no one has a crystal ball, the summer continues to be a time of historic lows in lending. As this trend has continued far longer than anyone could have anticipated, we still believe that now is the time to buy or refinance and take advantage of such amazing long-term money.

Q: What are the pros and cons of different loan options (traditional, VA, RD, etc.)?

Brint: Regions Mortgage offers many loan programs, including portfolio loans that are held in house. We look at each customer on an individual basis to determine which option is best.

Maddox: Each of the loans you mentioned have very specific reasons for a seasoned mortgage professional to guide a family or individual toward. The credit score, debt ratio, amount of available funds to involve in the transaction, and the type of home, second home or investment property someone is buying all play a role in which product best meets the needs of a borrower. Again, a local partner with a strong track record of knowledge and integrity is essential in searching through a variety of available products and investors to find the perfect feet for each individual story.

Q: Is now a good time to look at remodeling or even adding onto my home? What are the potential risks?

Brint: The biggest risks with renovation are around cost overruns and rate increase while you are renovating. Regions offers a one-time close construction renovation loan that eliminates rate risk.

Maddox: With rates at these lows, a renovation loan can be a great tool for families wanting to expand/ remodel their current home. Just like new construction, major renovations can have some window of rate risk if the permanent money is not locked in. However, many of these projects can be completed in such a short time frame, that the money can be safely locked and waiting for the completion.

Q: Is it better to consider smaller home improvement projects versus a significant renovation at this time?

Brint: It depends on your goals; if you are looking to make your home more comfortable and liveable, small improvement projects can certainly achieve that. But if you need a big difference or want to really change the value of your home, significant renovation is probably required.

Maddox: This, as do several of the questions, involves the individual story being shared with a local, trusted partner. Both types of projects have great benefit in the right circumstance. As a quick answer, I will point out that I always ask people to get a good estimate of total cost on the front end, then analyze with the help of the lender and perhaps a realtor or appraiser contact just how effective the renovation will be in adding true value to the home over time. Many times, people can greatly enhance not only their own experience in the home, but the long-term resale value. However, there are examples where people have poured money into a home expecting that result, only to find that what they upgraded was not really a monetary benefit long term. These are the kinds of things that, again, local professionals are here to assist with during the process.

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