In these uncertain financial times, I thought it would great to ask a few of my favorite local lenders some questions about the loan process and what they are seeing.
100% Financing a thing of the past?
Elizabeth Dabrowski (Sugar River Bank) -
While it is true that programs like FHA and VA have tightened up some loan criteria in recent months, that does not mean qualified borrowers must supply the full 20% conventional down payment. SRB offers a range of down payment options, each tailored for a customer’s particular needs.
Cathy Murray (Ledyard Bank) -
Not true! 100% financing is available through a program with the US Department of Agriculture for rural and small community home sites, called Rural Development. This program is NOT limited to first time homebuyers. Eligible properties are single family primary residences located in communities of less than 20,000 in population or in unincorporated county areas. There are income restrictions for this program. I am happy to provide more information on this program for anyone who is interested. You may also visit www.rurdev.usda.gov.
New Hampshire Housing Finance Authority (NHHFA) has a program for first time homebuyers that requires as little as 1% of the borrowers own funds. This is their Cash Assistance program that grants 4% of the loan amount to the borrower to use for down payment and closing costs. This is a maximum 97% loan to value. There are income restrictions for this program, call me for details on this program. Also visit www.nhhfa.org for more information.
Lynne Haney (Chase Home Lending) -
100% financing is still available through Rural Housing and VA loan programs. These programs have been around for years and both offer reasonable rates and fees so to ensure affordability for the borrower(s). Sellers are allowed to contribute to pay for all the closing costs, so a borrower can come to the closing table with no money! Also, the qualification requirements are more flexible than many of the programs being offered today.
What are the most popular lending programs that you are seeing?
Elizabeth Dabrowski (Sugar River Bank) -
Right now I have a flood of customers jumping into our 7/1 ARM. It offers a super low rate, caps to control future adjustments, and features which help SRB borrowers save money when rates drop in the future. One option is our “Program Change.” This allows a customer to get a new lower rate without having to do a full refinance, and it prevents the customer from starting a whole new term. At the time of application my borrowers set their payment goals, and I help them establish a plan where their income works best for them. Sometimes this means putting their mortgage into Bi-weekly payments for a faster payoff, sometimes it means doing monthly payments with yearly principal reductions where we recalculate their monthly payment based on the new lower loan amount. With an SRB mortgage there are no pre-payment fees or penalties, so our borrowers are free to plan their future on their terms.
Cathy Murray (Ledyard Bank) -
As of October 15th, 2008 65% of the loans I have been involved with have been adjustable rate mortgages (ARMS). This may surprise some due to the bad publicity ARMS have been receiving by the press. Borrowers want to take advantage of the low initial interest rates these products offer. For example Ledyard National Bank’s 3/1 ARM rate today (10-16-08) is 5.000%, this rate is locked in for the first three years, the interest rate may adjust every year thereafter. On each interest rate change date, the interest rate cannot increase or decrease by more than 2.000% from the interest in effect prior to the change date. There is also a life of the loan cap of 6.000%. These are good products for borrowers who may be thinking of selling or paying their homes off in the next 36 months.
Ledyard National Bank has a variety of mortgage programs to suit the various needs of our borrowers: Fixed rates, ARMS, Home Equity Lines of Credits and Home Equity Loans etc. As I mentioned previously we also work with national and regional programs to be sure to meet everyone’s financing needs.
Lynne Haney (Chase Home Lending) -
FHA is the most popular program being offered today. The program offers flexible terms to qualify such as allowing 97% financing (the down payment can be a gift from a family member), up to 6% seller contributions, no income limits, no first time home buyer requirements, no pricing adjustments for lower credit scores and the ability to have a cosigner to help borrower(s) qualify for the mortgage.
Lender’s View-Biggest issues that happen through the transaction?
Elizabeth Dabrowski (Sugar River Bank) -
The most common issues that come up during the loan process can often be solved at the time of application. Borrowers often fail to complete parts of the information needed or neglect to provide full documentation when needed. This can add days to weeks to the process needlessly. I tell SRB customers ‘the only stupid question is the one you do not ask.’ Get the answers you need and don’t feel that a mortgage need be a burden. I contact my SRB customers and review all aspects of the application before it goes to approval. Keep in mind your lender works for you. By keeping them informed you can avert a majority of problems that may crop up the week before closing. Here is my rule of thumb; If your lender contacts you- call them back as soon as you can. The other key to a smooth transaction is to keep your Realtor informed. Realtors are the linchpin of every deal and they have much to handle. The more your Realtor knows what you want and how you plan to negotiate terms with the seller the easier it will be for them to get the correct info to your lender. The good news about using local lenders and Realtors is that they already know the area and can usually smooth out any bumps in the road quickly and easily.
Cathy Murray (Ledyard Bank) -
The absolute worse thing a borrower can do is hide or misrepresent their financial standing. Be honest and factual with all of the information you provide your lender, then there are no surprises and the loan process should be very smooth. Ledyard National Bank provides our borrowers with a checklist so they know what they need to bring at the time of application. Not providing all of the necessary documents slows the process.
Lynne Haney (Chase Home Lending) -
Quite frequently I get calls from people who are dissatisfied with their current Loan Officer and want to transfer their application to me to help save their deal. These folks have come to realize during the process that they have been misled in some way such as the rate and terms they applied for are not available and also they are not getting the level of service they expected from their Loan Officer. In this market many people are only focused on the rates being offered when choosing a lender when that’s only a small piece of the big picture. I bring to my customers 25 years of lending experience and service levels that always exceed their expectations. It’s important for the applicants to work with a reputable seasoned Loan Officer they can trust and who remains hands on throughout the transaction.
Is your bank going to make it through the week?
Elizabeth Dabrowski (Sugar River Bank) -
First, let me address the capital issue. Right now SRB is currently one of the top capitalized banks in the state. On top of that, we never bought into the sub-prime loan mess either as a matter of loans we offered, or as a get rich quick investment for the bank itself. That makes SRB a unique lender right now: personal service and top mortgage products you can rest easy about having. What can a new borrower expect from us? We own our loans. So we have the power to work with our borrowers when the times get tight. It is in both our interests to see that the borrower stays in their own home. This is not a new fad policy that is the result of recent market conditions. Its how SRB has done things since 1895. I love hearing how the big banks are now catching on to what SRB has been doing all along as a matter of good customer service for our borrowers.
Cathy Murray (Ledyard Bank) -
Make it through the week??? Ledyard National Bank was recently ranked in the Top 200 in US Banker magazine’s list of top-performing community banks. Please visit the Bank’s website at www.ledyardbank.com to view a message to our community from Kathryn Underwood, Ledyard’s President& CEO. We are strong and financially stable!
Lynne Haney (Chase Home Lending) -
Chase has over a 200 year legacy of service and financial integrity and there’s no doubt the company will be around for many more years to come. Chase has been and continues to be featured in a number business articles as coming out on top as the leading lender in this market. I recommend anyone go on the internet and search Chase and they can see a number of articles that highlight the strength of our company. Chase stepped up to the plate and purchased Behr Sterns in April and Washington Mutual last month when both companies were on the verge of bankruptcy. JP Morgan Chase now has over 42% of the deposit base in this country and the mortgage company has a 1.8 trillion dollar servicing portfolio. Chase continues to focus on responsible lending practices and it committed to ensuring our customers both achieve and sustain home ownership.
How many different people work on the loan within your organization? I just dealt with Bank of America and their communication was terrible…lots of he said, she said…
Elizabeth Dabrowski (Sugar River Bank) -
No one likes surprises at the closing table. SRB customers know their originator and loan processor by name. That’s right. Our customers can call the people who handle their loans at any stage in the process and get the answers they want. But guess what, you won’t have to call. I personally provide updates via email or phone as each stage of the loan progresses. My processor also calls her customers and their Realtor every step of the way to keep everyone on the same page.
Cathy Murray (Ledyard Bank) -
Ah yes, dealing with 1-800-Who-Cares is very frustrating. I have two very competent, friendly, always at their desks processors; Lisa and Kristel. In the event that I am meeting with another borrower or out of the office Lisa and Kristel are available to answer any questions regarding loans in process. Underwriting (final loan approval) is done locally - in this state - no 800 numbers to dial! Ultimately the responsibility of any of my borrower’s loan process rests with me. I am accountable and look forward to working with borrowers through out the loan process.
Lynne Haney (Chase Home Lending) -
I am the primary point of contact for my customers throughout the transaction so to keep the process as simple and stress free as possible. I have been working many years as a mortgage lender and understand how to manage the people and the process very effectively. There are many loan officers that are not hands on throughout the process and inevitably given the number of people behind the scenes who are involved in the transaction that lack of involvement can lead to unnecessary problems for the customer.
I just want to say a quick thank you to Elizabeth, Cathy, and Lynne for taking the time to answer my pesky questions! If anyone has any questions, please feel free to comment here or contact any one of these great lenders directly.
Elizabeth Dabrowski
Sugar River Bank
603-477-3865
edabrowski@sugarriverbank.com
www.SugarRiverBank.com
Cathy Murray
Ledyard National Bank
603-526-7725
cathy.murray@ledyardbank.com
www.LedyardBank.com
Lynne Haney
Chase Home Lending
603-491-9253
lynne.a.haney@chase.com
www.LynneHaney.com
Source:
http://sunapeeregionblog.com/2008/10/26/whats-really-happening-at-the-bank/
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