As agents we have worked with many different lenders here in Des Moines. We also have some preferred lenders that have proven to us that they will go the extra mile to help our clients. And that speaks volumes to us. This month we asked a number of questions for our pros. Here is what they had to say.
We are turning the mic over to our elite group of professionals to ask them about today’s market and here is what they have to say. If you are looking for a mortgage or would like to do a refi on your home, please reach out to this group and let them know the Home Sweet Des Moines Team thinks they are the cream of the crop.
- Charlie Chedester – Midwest Family Lending
- Carrie Hansen – Clear Mortgage
- Steve SchraderBachar – Guaranteed Rate
- Jessica Moeller – Northwest Bank
- Shannon Thome – Fidelity Bank
- Linda Turner – Independent Mortgage L.C
Where do you see rates going in 2022? Rates in 2022 are going to be a wild ride! All the forces that have kept rates low the last several years have all gone by the wayside. International turmoil and challenges will help keep our mortgage-backed securities a safe place for investors and other countries. However, the US Fed and overall gov’t goals are changing. With less money being spent by the Fed/Gov’t to purchase mortgage-backed securities that market has been and will continue to get back to a more normal buying/selling process. Be prepared to have a loan officer in your pocket than can help you watch the market as best possible so locking interest rates can be a beneficial as the market allows.
Do you see buyers taking less time or more time to find the perfect house? Inventory of homes for sale, especially existing homes, doesn’t look to be improving any time soon. This is going to cause fewer choices and continued bidding wars. Iowa is always a bit sheltered compared to what the national news talks about (east/west coast markets). This tends to help us be less volatile, but Iowa has been a very popular place for people to move to…which just increases the # of buyers we have competing for the homes available. We expect to council buyers more than normal, helping them review their budget for any changes that can help them be confident & ready to bid as high as needed/comfortable as they find houses. Properly prepared buyers can remove many of the financial stresses that cause many buyers to hesitate or back off their searches.
How long is it taking for loans to close? Processing time for loan closings looks strong for this year! With rates increasing a little, this removes many refinance transactions from the workflow. The largest delays over the past 2 years have been appraisals, title/abstract & underwriting. All three of these areas/people have finally had a chance to breath and catch up. We have been seeing 30 day turn times be just fine…faster at time when rushes are applied as needed. Cheers to less overwhelmed partners so everyone can more easily work together to provide a smooth a pleasant experience for all parties of the transactions!
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? Each lender is a bit different, but we tend to see 2 ways ‘pre-approvals’ happen.
The ‘fast & easy’ method…talk over the phone to gather buyer data, pull credit and issue pre-approval based on data given…with little to no verification of income/assets/debts/etc. This method may make the buyer feel nice and move quickly, but errors/details/problems arise quite frequently when offers are written & accepted with this type of pre-approval. Once the actual paperwork/documents are collected/received by the lender, the buyer may or may not actually be approved.
Our way is to speak with the borrower to review goals/questions and their current situation. Chatting through all this is great and builds rapport, confidence, and most of all a fair understanding of the process and what to expect. After the conversation, a collection of all their appropriate financial information so credit can be pulled, and options/#s ran. Once everything is received, any possible hurdles can be reviewed and managed so the rest of the process can be as smooth, prompt and stress free for all parties as possible.
How do 2021 taxes impact a potential refinance or sale in 2022? Filing 2021 income taxes isn’t a huge deal for W2 wage earners. For self-employed & business owners may need to file quickly if they want to use the figures for 2020/2021. If they don’t need the income for 2021, a P&L can justify the 2021 figures and underwriting can use 2019/2020 returns for income calculation. This is an area we highly suggest reviewing early so #s is known, and we can help diagnose the best path for approval.
Any borrowers that want to use their 2021 tax refunds for the down payment would need to file quickly, as the refunds can’t be counted/used as down payment money until received. We all know how the IRS can be very slow at times, which can put a new purchase in a bind if they have a timeline in place for closing prior to the refund being received.
Where do you see rates going in 2022? Interest rates continue to increase, with hopes of stifling inflation. Right now demand is outpacing supply by a significant margin. Primary home rates have been rising for a few weeks, and more recently Freddie and Fannie have added Loan Level Pricing Adjustments (LLPAs) to all investment properties and second homes, which means loans on those properties will be a point or higher on the interest rates. The intent seems to be to cut off investors, increasing supply for those purchasing primary homes. But, because real estate continues to be a great investment, many investors will just choose to pay all cash for properties, or will still see value in diversifying across multiple properties with financing even at the increased interest rates.
Do you see buyers taking less time or more time to find the perfect house? More time, given we are in a rising interest rate market where from last year monthly payments could be anywhere from $100-$400 more a month making buyers more cautious to really love the home they purchase.
How long is it taking for loans to close? Max 35 days.
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? There is a list of the items that we need to process your home loan. Call me direct to discuss and I can walk you through the process.
How do 2021 taxes impact a potential refinance or sale in 2022? If income is significantly higher or lower than past years, this could be a positive or negative effect on refinancing. For example, if your income is higher improving your debt-to-income ratios, this could help you get a better refinance rate. Same is the case with amount one qualifies for when looking to buy.
Do you see buyers taking less time or more time to find the perfect house? Buyers are taking more time, yes, but I believe it has more to do with the lack of homes for sale to choose from than anything else really. There simply is not enough supply of homes currently available to meet the homebuyer demand.
How long is it taking for loans to close? On average, it’s about 22 days currently from Accepted Offer to Clear to Close.
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? Minimum requirements would be the most recent 30 days’ worth of paystubs, last 2 years w2’s from all employers and last 2 years federal tax returns if you are self-employed. If purchasing a home, most recent 2 months’ worth of bank statements will also be required.
How do 2021 taxes impact a potential refinance or sale in 2022?
If self-employed, income reported for taxes after all deductions are accounted for is the income typically used for qualifying for a loan.
Do you see buyers taking less time or more time to find the perfect house? I think this will depend on inventory and the buyers situation. When inventory is low and they must move, they may not have the ability to wait for the perfect house. But if there is greater inventory and/or the demand decreases, people will have the ability to shop around and wait for that perfect house.
How long is it taking for loans to close? On average it seems that it’s taking 30-40 days to close with some outliers either way.
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? An application is needed along with recent paystubs and W2s and bank statements. Self-employed borrowers also need to submit tax returns for the last 1-2 years. Different circumstances may require additional documents such as divorce decrees, letters of explanation, deposit documentation and a variety of other things all unique to that person’s situation.
Do you see buyers taking less time or more time to find the perfect house? I’m finding that buyers are making their buying decisions rather quickly. Since inventory is low, buyers are tending to make the decision fast.
How long is it taking for loans to close? We can get a loan closed in as little as 2 weeks. However, we prefer 30 days
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? The basic list of financials are 30 days of pay stubs, 2 years W2s and 2 months bank statements with all pages. Every situation is different, so additional items may be requested upon review of that profile.
How do 2021 taxes impact a potential refinance or sale in 2022? If this is regarding gains on sale, the IRS requires Capital Gains if you make more than $250k as a single person or $500k for married couples.
Do you see buyers taking less time or more time to find the perfect house? For buyers that are willing and able to be flexible, they perfect homes are out there, but they seem to be taking a bit longer to find based on availability. That being said, a preapproved buyer has a much greater chance of having an offer accepted with how quickly things have been moving.
How long is it taking for loans to close? We can close in under 30 days in most cases; if an appraisal is not required it can be even less time.
If I want to refinance or buy, what info do I need to provide to get pre-approved and final loan approval? For preapproval: a recent paystub and 2021 and 2020 w2s if an employee, and most recent 2 years filed federal tax returns if self-employed. For purchases: source of funds for down payment- all pages of the most recent bank account statement(s) or details regarding a gift if applicable. For refinances, the most recent mortgage statement(s) and homeowners’ insurance information. For final loan approval, we need the most recent documents (paystubs/bank statements/mortgage statements as applicable) as they become available. Every situation is different, and we may need further clarification/documentation of a large deposit on a bank statement, for example.
How do 2021 taxes impact a potential refinance or sale in 2022? We recommend consulting with an accountant and/or financial adviser for specific tax implications and rule changes, but the mortgage interest and PMI deductions have changed from the 2018 tax reform and starting in 2020 PMI is again deductible in most situations and can be claimed retroactively for 2018 and 2019. Check with your accountant for specifics to your situation. For families with children, the tax changes are likely to affect the 2021 tax refunds if advanced payments were received during the year, but for some situations the tax credit increased substantially, as is how it was calculated. There are many financing programs and options available for buying and refinancing, so it is never a bad idea to check and see what makes the most sense for you.
No one paid to be on this list or submit information for this article. We reached out to them and they gave their feedback. Some were not able to respond at this time, but check out our complete list of mortgage lenders: https://homesweetdesmoines.com/mortgage-professionals/