Hi, this is Tom here from the Heath Team at Nova Home Loans. I wanted to bring you an update from the mortgage world of questions that I’ve been answering quite a lot of the last couple of weeks. I thought I’d do a video put on a fancy shirt and share some knowledge with you that I have.
Keep in mind, this is recorded on April 7th, and these topics are changing, so this is not meant to be the end-all video. It’s just meant to be kind of a status update, but stay in contact with your mortgage originators. And make sure that you get updated information and know that company to company things are varying a little bit more than normal.
The main questions that we get are;
- what’s happening with interest rates
- what’s happening with loan programs
- what’s happening with the appraisals?
Interest Rates
Interest rates have been extremely volatile since the beginning of March. The last four or five days we’ve seen a little bit of a calming in that market, they’re still moving up and down but not nearly as wildly as they had been in early and mid March.
Personally, I believe rates will be low for at least the remainder of the year as the federal government works to keep them low to spur home buying and refinancing. That being said, we’re operating off of the information we have. Something that we are not aware of could happen tomorrow and that could change those projections. But we think interest rates are going to be low for a period of time.
Loan Programs
As far as loan programs, we have seen a contraction of what’s available. Most lenders have increased the credit score requirements on at least their FHA, VA, and USDA loans. We are at a 640 credit score on ours. I know some lenders are a little bit lower and some are a little bit higher. Where that goes will be a reflection of what’s happening in the secondary market which buys these mortgages. There just has not been the demand for those lower credit score borrowers.
We’re seeing a contraction at the other end of the spectrum with our Jumbo products, our more non-conventional programs. Things with loan amounts over basically 510 here in Pima County or more exotic things where we’re using bank statements to verify income. The liquidity for those types of loans has really dried up and we’re seeing many of the major players in those arenas take a step back and are not looking for any more loans, so there are fewer and fewer options in that area.
Down Payment Assistance programs are still operational here in Tucson, Arizona. HomePlus and the Tucson and Pima Homebuyer Solution. They are still operating but they’ve had some liquidity issues themselves. They’ve increased some of their requirements and they’re making changes on a regular basis.
The other programs like Home and Wish are still in existence. We’re monitoring what’s out there and trying to make the best decisions based upon the information we have at that time.
Appraisals
Appraisals have been given a little bit of leniency when it comes to whether an appraiser actually needs to go inside of a home. On most purchase transactions, a desk review with a drive-by will be sufficient. Again that’s case-by-case, don’t just assume that to be a hundred percent across the board. It does depend a little bit on the loan product and the circumstances. There’s a a bit of flexibility as well in refinances but not as much, so again case-by-case check with your loan originators.
One area of concern that is affecting a lot of borrowers at this point is their income situation. You probably know we are required to verify income as one of the last things that we do in the loan process. We verify everything up front and then we confirm at the end that nothing has changed and obviously if it’s taking 30, 45, 60 days to complete a loan because of whatever the bottleneck may be, then by the end of the process things could have changed for some of our borrowers.
Again, case by case; we’re looking at each situation figuring out what we can do. It depends a lot on the information we receive and it depends on the employer, lots of different factors. The loan program will also come into play. That it is creating a challenge and if there is no verifiable source for income, then we are not likely to be able to continue on with that particular transaction.
So a lots of different pieces of the puzzle that we are putting together on each and every transaction. Volume is high, I’m sure you’re seeing that title companies are working very hard and very diligently. Appraisers are doing the same, our processing staff and Underwriteru are working pretty much non-stop, nights, weekends. They’re really working hard to turn out the volume that has been put into the system with these low rates and will continue to work hard and make these things happen for our consumers here in Tucson and in the area in Pima County.
But I want you to know that we are also concerned about safety and doing things responsibly. So that does mean there can be things that take a little bit longer than we used to and appreciate everyone’s patience as we get through this process together.
Tucson Helping Tucson
And speaking of together, a little bit of a bright spot. There’s a lot of community activities out there supporting those that have needs in our community and I encourage you if you’re not involved with some to head on to Facebook and find a group. It’s very uplifting and rewarding when you can help someone that is in need and I’ve been fortunate enough to work with a group called Tucson Helping Tucson, I encourage you to check out that website. We are helping the artists and creative communities get back to work and we’re using their work as a platform for fundraising to help small businesses.
It’s a stimulus package for artists. It’s really a business saving opportunity for some of the businesses. We’re working with the Community Investment Corporation here in Tucson so that everything is done efficiently and quickly with monies that are raised.
My name is Tom Heath, the Heath Team at Home Loans, if you have questions, feel free to reach out to me. We’ll try to put out some more updates here as things change, and keep in mind everything we share is based on the information we have at the moment. That information could change quickly, which means these updates and results could change quickly. If you have any questions though, reach out. I appreciate your time. Thank you.
