Our mortgage man-in-the-know Matt Young, loan officer with MDC Financial Service Group, was kind enough to answer some pertinent questions about the current state of the mortgage market. We covered a bunch in our first article, but Matt’s answers were so comprehensive, we couldn’t cover them all in one incarnation. Here’s the second part of what he had to say:
Do you work with and recommend online lenders like Quicken and Lending Tree? If not, why not?
Matt Young: We use Quicken as one of our funding sources, but generally, the online sources are very light on details and heavy on promises. Many times, they won’t even comply with the basic disclosure requirements imposed on lenders. I think it is always best to use someone that you know and can trust and just as important, can get hold of when you have a question.
Is the Internet affecting your business?
The Internet is really making things easier for lending, over the past couple of years especially. We have online means of completing a loan application either on a desktop or on your mobile device. There has been a big transition of people who previously used to want to come in to complete a loan application in-person, but now the vast majority would rather complete this online. Once a buyer is in escrow and we are completing the official purchase loan package, most lenders now will accept the entire package with electronic signatures. Most lenders are trying to go paperless as much as they can. However the piece of the process that hasn’t changed is still the final set of loan documents that must be notarized and signed by each borrower.
What is your advice for first time buyers without a lot of cash?
There are many great loan options for first time (and non-first time) home buyers without a lot of cash. We have 3 percent, 3.5 percent and 5 percent minimum down payment programs that have great rates and good mortgage insurance premiums. Additionally, we have a new investor that offers the 3 percent down product but will contribute 2 percent of the down payment, so the buyer walks in with immediate equity from the lender. First time buyers can also take advantage of some programs offered by the San Diego Housing Commission (City of San Diego only) where the SDHC will loan 17 percent of the borrower’s 20 percent down at a low interest rate and is payment free until you sell your home. The added benefit is that the buyer avoids mortgage insurance because the total down payment is 20 percent. Now more than any time in the past five years, cash-poor buyers have great options to get into a home purchase.
Is this a good time to refinance?
It is a great time to refinance. As I mentioned before, rates are back down to near all-time lows and recent buyers from even just six months ago, can save hundreds of dollars per month by lowering their interest rate. I have a handful of clients who refinanced six to twelve months ago and paid a higher rate to take cash out to improve their property and/or pay off some credit card debts. Well, now they can refinance as a rate and term refinance at a rate that is nearly a full percentage point less and save quite a bit of money.
Matt seems to enjoy his job so much that I asked him for his opinion of mortgage brokerage as a profession. As you might expect, he was all in, claiming that every day was new and that helping people to make that most significant and rewarding purchase, a home, offered him significant gratification. It’s good to have folks like Matt in our corner when we need him most. Thanks, Matt.
