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Mortgage update from Nathan @ Main Street Home Loans

Randal Engelmann & Erik Gould

We are Randal Engelmann and Erik Gould, partners in providing exceptional customer service...

We are Randal Engelmann and Erik Gould, partners in providing exceptional customer service...

Apr 27 9 minutes read

 A quick video with Nathan Hartseil at Main Street Home Loans to give an update on the current mortgage market during the Covid-19 Crisis. What is happening with Jumbo Mortgages, Forbearance, and a Fall Forecast! 


Randal:
Welcome Nathan from Main Street Home Loans, here to discuss with us today what's happening on the back end of his business at Main Street Home Loans and to address some of the things and the challenges that he's seeing. So welcome, Nathan.

Nathan:
Well, thank you for having me. We are in unprecedented times right now. Anybody in the mortgage industry or anybody in the loan process right now has experienced somewhat of a rollercoaster. We are taking things day by day. What you hear from one lender or one bank, you may not hear from another. We are not 2008, even though it may feel a little bit like 2008 again, but we're in this for all different reasons right now. Really, I don't think at any fault to the financial industry. We're just dealing with an epidemic right now. As the government passes new legislation as well, kind of puts that hard hand [inaudible 00:00:58] servicing companies in the mortgage industry. For instance, last week mortgage forbearances were up 78%. Now, people think this is great, right?

Randal:
That's a new word for all of us, isn't it, forbearance? It's not even something we-

Nathan:
Yes, it is.

Randal:
I think we all [inaudible 00:01:13] that up.

Nathan:
Well, people think this is great. "Hey, I don't have to pay my mortgage for three months, six months, 12 months."

Randal:
Really, I think the most important point, and talking with you about this a little earlier, is that forbearances are something that are great for the consumer that's faced with financial uncertainty and faced with financial challenges of unemployment and that kinds of thing. But there certainly are challenges on the backend that is changing the mortgages, right?

Nathan:
Correct. So what this does, basically, in a nutshell, forces the market to tighten up. We have become a non-risk-taking market right now. VA loans, FHA loans are almost nonexistent.

Randal:
So by non-existent do you mean you can't get that loan or does that mean that they just happened to have a higher interest rate to do that kind of borrowing?

Nathan:
Correct. I mean the interest rates are a direct correlation with risk. So what the market deems risky is basically passed down through interest. We are at an all time low in some of these categories that people fit into.

Randal:
Do you think that zero percent interest rate that people are hearing about in the news?

Nathan:
Did you say zero percent?

Randal:
Yeah. I actually had, in a video we just released the other day...

Speaker 3:
Certainly saw the Fed slash rates to zero a little bit ago and we've had a lot of calls from our clients, "Saying how do we get that rate?"

Randal:
We were kind of trying to clarify that, and I thought I'd let you address that as well since this is your profession.

Nathan:
So a lot of times that will directly affect revolving lines of credit, such as credit cards, home equity lines, more short term loans to where the mortgage industry predominantly runs off your 10-year treasury. So when you're looking at mortgage interest rates, you have a better shot of becoming more accurate watching your 10-year treasury bond than you do the Fed fund.

Randal:
So that 0% interest rate, that's not available for my clients that are buying a new house next week.

Nathan:
No, it's not. I wish it was, Randal, because my phone wouldn't have stopped [inaudible 00:03:20] At any rate, with this market we do see some risks being passed on to borrowers. If you're not putting 20% down payment. Obviously with the forbearances, the loss of jobs, the defaulting of mortgages right now, mortgage insurance itself is increasing, and we do see that increasing in the near future even further. On a good note mortgage [crosstalk 00:03:47].

Randal:
[inaudible 00:03:51].

Nathan:
On a good note, mortgage economists and speculators do think rates are going to stay favorable, hopefully throughout the end of the year. We're trying to call our fall market a spring market with good interest rates this year. Some of us who have had shortfalls in the real estate industry in the beginning of the year, hopefully we can make that up in the end of the year.

Randal:
Are you talking with buyers that are looking to place offers now or what's the bulk of your business that you're doing? Are you doing mostly refinances with these low rates?

Nathan:
I got to say mostly refinances right now. We are getting pre-approvals for purchases. It is a good time to get pre-approved, because as you know, we never can truly calculate when does that spring market hit? When does that fall market hit? The people who are on the fence and not pre-approved may just miss out. You need to be ready to move at a moment's notice when that house comes up. And you know better than anybody in the real estate industry. You snooze, you lose in this industry.

Randal:
Bright spots that are happening for you are really conforming mortgage. People with a bit of money to put down are really being favorably rewarded with really great interest rates these days..

Nathan:
They are, and under 135% of the median income in the area. So MassHousing, living in the state of Massachusetts has one of the best bond programs through the state out of most of the states I'm licensed in and I know of. So if you make under 100, I want to say $148,000 a year, you can get an ultra low interest rate with up to 97% financing through MassHousing. Now they also have under 100% of the median income, which right now is just under a 114,000 I believe, which we have a down payment assistance program. You can put down 5% down payment, but that down payment can come from a down payment assistance second mortgage. So if you're over a 680 to 700 credit score and fall into one of these ranges, very highly favorable program as well. And it falls under conventional guidelines.

Randal:
And this, ladies and gentlemen, is why when you talk to a real estate agent that knows what they're doing and you ask them, what rate can I get today? And they tell you, talk to your mortgage broker because they can best handle it. This is exactly why. Because there's so many different programs, and to say, well, the rate is three and a quarter. For what? Right Nathan? I mean it could be your, there's so many different packages and really being aligned with a good mortgage broker in a good company like Main Street Home Loans can really set you in a position to be a strong buyer, make strong offers, and get the best rates you can for your specified program and your niche of the market [inaudible 00:07:04] .

Nathan:
I mean, people call all day long, what's the going rate? The most realistic answer is how risky are you? Rates are based off risks. If you fall into a top tier, credit score, down payment, conventional loan bucket, then you have the very best rate that can be offered out there. Any variation to those, lower down payment, lesser of a credit score, these are things we can work on. If you have time we can get you up to par to achieve that top-tiered interest rate. If not, you know we have programs available. It's just don't expect, I'm going to get that 3% interest rate right now, but I have a 620 credit score with 5% down payment. It does not work that way.

Randal:
Well, Nathan, thanks so much for kind of giving us a quick little update of what's happening out there. So people can contact, where can they find you?

Nathan:
Directly through my website, www.thenht.com. T-H-E-N-H-T.com for the Nathan Hartseil team.

Randal:
We'll just pop a little link and give them your phone number and email there as well. But thanks so much for joining us. It's always insightful. I do have to tell you, everybody that's watching, if you want someone that will research, excuse my, pardon my French, researched the hell out of a product for you and really go to bat for you to find you the very best products, this is your guy. He is amazing at really digging deep and finding amazing products for people. He's done it again and again for your clients and that's why we love referring you. And thank you so much, Nathan, and I certainly hope that you and your family continue to be well and look forward to a very prosperous coming year.

Nathan:
Well, thank you Randal, and thank you, Focus.

Randal:
Until next time, I guess I'm supposed to say stay tuned and stay focused.

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