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All listings available to view on www.marksellsmt.com or call Mark Beck 406-261-6602. Dodd Talbot can be reached at 406-314-7222 This video is for entertainment purposes only, I am not a listing agent of the Alta Views development, but can offer you representation as a buyer for any property in the state of Montana, at the sole expense of the seller. No copyright infringement of any kind is intended.
While the COVID-19 pandemic has made major changes to how realtors do business on the front end, the major changes in the lending world have happened behind the scenes. I have used video conferencing for meetings instead of in-person consultation. I find the ability to look someone in the eye extremely important when talking about something as important as a home mortgage. Even after the pandemic, I will encourage clients to video chat with me if we are unable to meet in person.
So what has changed in the lending world over the past month? I want to break down who can truly benefit, who may now run into some obstacles, and who needs to wait out the panic from the current lending environment.
For many, not much has changed. Well qualified buyers can take advantage of historically low rates. If you have never owned a home before and have a stable source of income, these next few months may be a great time to jump into home ownership. If you currently own a home and have an interest rate that starts with a 4, you may want to call your local mortgage professional to explore a refinance opportunity.
Clients who currently own a home that want to buy a new home and turn their currently home into a rental may face some hurdles. One change across the lending world is reserve requirements for owners that own multiple properties. Many banks are requiring 6-12 months of monthly payments to be in a bank account at closing. Some lenders are even requiring seeing a 1st, last, and security deposit in addition to a lease agreement for the departing home. Self-employed borrowers have also had their options significantly diminished. Many lenders are only taking 75% of income (lowering the amount you can borrow) or requiring 12 months of reserves to be put aside at the closing table (affecting down payment amounts.)
So who is going to be heavily affected by the current pandemic? This week, cash-out refinances are the latest victim. Fannie and Freddie (the two biggest purchasers of loans) stated they will not buy any cash-out refinances that are in forbearance. Lenders responded with raising rates on these loans by 1-2% or outright refusing to offer them overnight. Jumbo loans (anything over $510,400) are no longer readily available by lenders across the board. FHA, VA, and USDA loans have also had their lending options lowered. Some banks have stopped offering these programs or raised minimum credit score requirements. Banks like Chase have stopped offering mortgages to anyone who does not have 20% down or a 720 credit score. That disqualifies a large majority of potential clients.
The big question is which of these changes are permanent and what will rush back as soon as the country starts re-opening? Well, it is anyone’s guess. Lenders have lowered the amount of risk they are willing to take due to the uncertainty. It is my belief that some minor changes may come from everything, but once the dust settles, the affected loan programs will resurface.
In the short-term, the good news is that there are lenders out there who have not made these changes, you just need to do your research. More than ever, if a bank you are working with denies you, do not let that kill your hopes. Another lender may still be working off original loan requirements and can get you approved!
While Black Diamond Mortgage have made operational adjustments to continue succeeding throughout these unprecedented times, our customer facing side is still business as usual. We continue to offer a myriad of lending options and are always looking to expand our portfolio. Two of our favorite lenders made major changes to their lending options. One bank completely removed all government options and the other raised their rates. Instead of limiting ourselves to these lenders. We have recently added 4 new lenders to our portfolio to help keep every option open for our customers.
Do not let COVID-19 scare you from jumping into the real estate market. Banks are lending money, realtors are showing homes, and title companies are getting deals signed!
Loan officer: NMLS# 1724580
Only a few short months ago I was showing houses in Swan Lake, my clients and I were jokingly discussing if they should make an offer or not on the property. What was the laugh all about? Coronavirus was creeping into the headlines of the news, this oddly named virus brewing far East of us in China had actually come up in conversation! My clients laughed saying “who knows, maybe the whole world will shut down?” I admit I brushed off and replied with “yah know; 'Can I get Coronavirus from Corona beer?' Is a top search on Google right now!” which was in fact a true statement.
Fast forward to today, almost 30 days after Gov. Bullock’s stay at home order, much has changed in our world! While Real Estate has remained an essential business, it has not been without many adaptations. For the first time ever I wore gloves and a mask to a showing as did my clients; I also did more video showings in 30 days than all of last year!
What's very interesting is that “Video Tours” are now a request from prospective sellers, when before it was just an added feature to the listing that hardly seemed to matter to the seller. Why is this worth mentioning? In 2019 35% of home buyers consulted a “Video Website” while searching for their home*, which was over a 20% jump from previous years. Clearly online video is a trending method to market and sell Real Estate, and COVID-19 has forced the industry to use these methods to keep the market going.
Consumers that never used products like zoom, skype, or maybe never considered watching a video home tour on Youtube now have, and likely enjoyed it! What does this mean for sellers going forward? I predict buyers will stick with these products going forward and video will become an increasingly necessary tool to grab attention of buyers and sell your home. If you're considering FSBO and want to compete with other homes, it might mean you need to orchestrate; lights, camera, action professionally in your own living room! In addition production skills may very well be a new test on which agent you select to sell your home, and devoting profits from listing commissions to ultra high production films of that very home could become the new norm for agents.
More specifically can we expect more of an influx of out of state buyers to Montana? I’m betting yes… This is why; when the statistics role out it will be widely known that Montana was reasonably low on the affected list. I think this could be a headline and will undoubtedly put Montana on their map as a place to consider moving the family, from the prospective buyers I’ve spoken to COVID-19 has “pushed them over the edge” on making the move. In my opinion these buyers will gravitate to listings with high production quality videos and go through the sales process remotely to narrow down home inventory, before making the flight out.
Mark Beck is a REALTOR® with the Northwest Montana Association of REALTORS®, he has been licensed and selling homes since 2018. Mark has been a resident of Flathead County since 2007. Mark places an emphasis on social and electronic media to market and sell homes, along with utilizing the global reach of the RE/MAX brand.