We turn once again today to our mortgage man-in-the-know Matt Young, loan officer with MDC Financial Service Group, to take the temperature of today’s mortgage market.
We all know what an enormous effect loan availability and terms have on the real estate market in general, and Matt is on the front lines and has kindly offered to clue us in. Here’s the first part of what he had to say:
Tell us about yourself, your background and business.
Matt Young: I have been in the mortgage industry since spring 2002. Prior to that I was (still am) a licensed attorney in California who became disillusioned with my legal work. I have always been interested in real estate and my friend was a successful loan officer and asked if I wanted to come work with him to help him through a refi boom that was going on at the time. I did and the rest is history. Little did I know what a roller-coaster ride the industry was in for over the coming decade. But we not only survived, but succeeded. In 2005 we opened a new company, MDC Financial Service Group along with our affiliate Ascent Real Estate.
What is the current state of the mortgage market?
The current state of the mortgage market is strong; rates are near all-time lows once again, and real estate values continue to grow, making it one of the best investments out there. People have this ongoing misconception that there isn’t a lot of money to be loaned out, however that is just not true. Getting a loan brings with it a lot of hoops to jump through. Each loan involves a full review of a buyer’s employment and income history for the past two years. Any and all funds being used for down payment and closing costs must be paper-trailed to show their source. These are the two areas that frustrate buyers the most. But as I tell people, the low rates and property values that are expected to continue to increase make this a worthwhile annoyance to go through.
Who are the top lenders you are recommending these days?
I recommend anyone who can broker loans out to different lenders. We have both banking and brokering ability. As such, when we pre-approve potential buyers, we can identify things that may be an issue at one bank that may not be an issue at another. When you go to a bank for your loan, if you run into a dead-end, there are no other options for you. You will simply get a denial. Just this week, I am fixing two purchase loans that fell apart at the original bank because of each bank’s “overlay” rules, which are rules that they have that are over and above Fannie Mae’s or Freddie Mac’s guidelines.
What trends do you foresee for 2017?
I see the continued healthy levels of appreciation in the housing market, levels that are currently sustainable with the income growth we have seen over the past couple of years and that trend doesn’t appear to be waning. I also see the continued, but very slow, addition of new jumbo products into the marketplace. These jumbo loans offer loans higher than the conforming loan maximum for San Diego County of $580,750. There are several jumbo loan programs out there, but more investors coming in will only mean lower rates as investors try to win business.
Thanks, Matt. Interview to be continued.
