With questions about the economy and the effects the pandemic has had on it, we reached out to a mortgage industry expert Marla Guillaume for some insight on what is to come.
Marla is based in Louisville, Kentucky and has 30 years of experience in the mortgage industry. She has served on the Mortgage Bankers Association Independent Mortgage Bankers Executive Council since 2016 and is licensed to originate in 19 states. Currently, she is the director of multi-channel origination at Thrive Mortgage LLC. She also happens to be the mother of Team Staples’ team member, Erika Leet. “She’s pretty awesome,” says Erika.
Here are some questions we asked her:
What are some affects you are seeing due to the Pandemic when it comes to borrowers trying to get approved for a loan?
“We are seeing a lot of trends when it comes to borrowers being furloughed or accepting relief payments and the effect that has on their loan approval. If the borrower was furloughed, they unfortunately must be back to work to use the income to qualify for a mortgage. If the borrower went into forbearance, all the agencies have made clear guidelines that the borrower has proof that they have paid the last 6 months of their payments to qualify for a new mortgage. As far as a self-employed borrower, if they took PPP funds (Paycheck Protection Program) this could have a negative effect. The borrower must prove that their company can sustain itself should they have to pay the money back. I have not come across this yet personally, but it is a possibility.”
Are you seeing any trends, good or bad, currently when it comes to situations with borrowers?
“The only trend I am really seeing is that houses are going so fast! There are bidding battles in this current market. I recommend that borrowers get approved before searching for a new home. That way there are no delays on offers for a new home or issues with the loan process. One thing to know with bidding wars - sometimes the purchase price can end up being higher than the appraised value, the lender must base their loan guidelines on the lower of the purchase contract and the appraisal. So, there may be additional cost for a borrower if the appraisal value is lower. We have seen this several times in this market.”
Predictions on rates for the rest of the year and into 2021?
“Rates should still be low the rest of this year and we are predicting next year they will be low as well. Maybe not AS low as they are currently, but still low. We have no current indicators to tell us they will be going up drastically.”
Any comments on the election and how that may affect your industry?
“The election could have positive and negative effects for which ever party is elected. Neither party is perfect for the industry. But if the economy is good, people will buy more houses. And if the pandemic restrictions are lifted, we expect to see more job opportunities, travel etc. which will lead to more housing purchases.”
What are some of the benefits in today’s market when it comes to using an independent loan company instead of a bank or credit union?
“Homeownership is the biggest investment a borrower will make. You would not trust leaving your kids under someone’s care without investigating them or knowing them first. So, you need to do that when investing. Look for an independent mortgage banker or mortgage broker who only deals with Residential mortgages, nothing else. Be sure that you are dealing with someone that is a specialist in your needs. Usually, they have several programs to fit a client’s needs and can close faster as well. Not that banks and Credit Unions are bad, there are a lot of mortgage specialist there as well, just make sure whomever you speak with is experienced and are only handling residential mortgages.”
Marla Guillaume NMLS#188448, Thrive Mortgage is an Equal Housing Opportunity Lender.
SO, there you have it!
If you have more questions about financing a home or would like a list of Team Staples’ preferred lenders in the Stafford and Fredericksburg areas, please let us know!