The world of mortgages has done a lot of shifting over the last few years, so Consumers mortgage experts David Pendley and Josh Summerfield are here to break it down. Tune into this episode of Money, I’m Home with Lynne Jarman-Johnson to stay up to date on all things home financing.

 

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0:00:06.8 Lynne Jarman-Johnson (LJJ): Money, I’m Home! From finance to fitness, we have it all. Hi, there, I’m Lynne Jarman-Johnson and here we are with our podcast about home financing and making sure you can get into that home. It’s been such an up and down rocking year and our experts are here again to join us. We absolutely love having you guys here. Josh Summerfield and David Pendley. They lead our Consumers Credit Union mortgage team. I’m not afraid to say it, guys. We have the best team on the planet.

0:00:33.4 David Pendley (DP): Little partial, but yeah, I would agree with that. [chuckle] Yeah, we have a fantastic team!

0:00:38.4 LJJ: Hey, David. I’m going to start with you. David is our vice president here at Consumers, but you know what? You also bring to the table, David, a wealth of information on a national scope and you get to see what’s going on as you talk to all of the individuals that you’ve worked with throughout your career. Tell us a little bit right now about what the market’s looking like, David. I know people right now who are trying to sell their house and it’s just sitting for a little while, which is such a different story.

0:01:05.3 DP: Yeah, so realtors refer to it as market time. What is the current market time? Otherwise, how long from a listing to a sales contract? In the last couple years, it’s been very short; one, two, three, five, seven days, something like that. And we’re actually getting a real market time, maybe 20 days, maybe 30 days depending on what market you’re in. Now, this sounds negative. It’s actually a really, really good thing because it allows inventory to come onto the market. It allows the buyer to actually compare a house to other homes. Otherwise, when you were walking in a listing last spring, they’d say, “Okay, we have five offers. Jump in the hopper, make your best and final. Right now, we’re doing an auction format.” Well, that’s gone away. And they also would encourage buyers to… “Oh, by the way, wave all your inspections because if you want to win the bid, the seller ain’t fixing nothing.” [chuckle] And so, now it’s back to a little bit of normalcy, which is a really, really good thing for the buyer. And to be honest, I think it’s a good thing for the seller, too.

0:02:07.2 LJJ: I think what you just said, David, and I’m going to send this question over to Josh, is that as-is, is gone. Is that right, Josh?

0:02:15.4 Josh Summerfield (JS): Yeah, it really is. Which like David mentioned, it’s a good thing. Now, buyers aren’t getting stuck with going into a home and not knowing what they’re getting into. They’re able to take their time, compare it to other homes like David mentioned, but really get down to the nitty gritty of the inspections and maybe ask for some repairs, whether it’s a roof or plumbing, things that otherwise they were previously walking into and happen to maybe put themselves in a little bit of a bind in a cash situation because they didn’t have the funds to repair it. So, it is a good thing overall that we’re starting to see.

0:02:51.4 LJJ: And when you talk about the cash and the upfront and all of that bidding war that seems to now have tempered, thankfully, there’s also just now out on the market that the lending amounts that you can actually apply for are higher. Is that due to inflation, David? How does that work?

0:03:10.3 DP: I think it’s a combination of things, yeah. In certain parts of the country, the West Coast, East Coast and different hubs, housing prices have literally gone through the roof. And so, the federal government is trying to encourage that entry-level buyer, so 700 and something thousand dollar mortgage is now our maximum Fannie Mae, Freddie Mac entry-level buyer price range. In West Michigan, not so much, but that’s our new Fannie Mae and Freddie Mac limits.

0:03:45.2 LJJ: That is absolutely jaw-dropping to think of entry-level at that, Josh. I know Michigan’s a little bit different, but even then, to see what an entry level house is, if you were buying a house 20 years ago, you just never thought that that would happen like that. Do you remember when times were a little different in the sense of your entry-level cost?

0:04:09.4 JS: Yeah, it’s interesting to go back and look at those things over time, right? And now with the loan limits going up to $726,200 versus just coming up from $650,000, and before that, $540,000, $417,000 before that. It’s been a steady increase quickly. And we were talking earlier that it was $417,000 for a long time. And now, just in the last five years, it’s ramped up quickly. And obviously, costs in some of the bigger areas are a big piece of that. We don’t see it as much in West Michigan, but it is nice for those folks that are in the $400,000, $500,000, $600,000 range to now not have to go to jumbo financing or split up financing. They can do it all on a conventional loan. And we have that ability now. Overall, West Michigan where we mostly operate is $250,000 to $300,000, $350,000, in that range. So, we don’t really mess with that too often, but we do some lending in other states and other areas where it really is going to help.

0:05:06.4 LJJ: Well, and I love what you just said, is that we don’t do it too often, but we do do it. So David, can you tell us a little bit, we’ve got a portfolio of lending products that are second-to-none for buyers out there who might have a unique situation.

0:05:20.4 DP: Yeah, it’s amazing the offering that we have currently in our marketplace. I mean, zero-down, really buying a house with zero money down? “Oh, it must be an exorbitant rate.” No, it’s not. It’s a very, very attractive rate with no PMI, no private mortgage insurance. And so we do that for the average buyer, we’ll do it for… We have specials for what we call “At your service,” which are policemen, firemen, EMTs, things like that. We have it for medical people and…

0:05:53.4 LJJ: Educators and teachers.

0:05:54.3 DP: Yes, yes! It’s amazing. So, we want to help partner with these people in buying their homes. We like to help everybody, but especially first-time homebuyers. Let’s get you into that home. And then we also do some land loans and lot loans and investment properties and second homes and some really great financing options that we just lend out our own money. It’s not going through Fannie Mae or Freddie Mac or FHA or VA. We lend it out ourselves.

0:06:23.5 LJJ: Well, I’ll tell you what, we are going to talk next month about the new year, getting that house ready for spring. It is so critical now, especially with how you have just said, look at the time of “as is” and just “come in and you’re going to get multiple offers” is probably over. Well, okay. It’s over, isn’t it, Josh?

0:06:43.4 JS: Yeah, it’s pretty much over. [chuckle] At least, I hope it is. [laughter]

0:06:47.3 LJJ: So, we’re going to give you some tips and tricks on that and getting ready for spring, but also tell you the most important person that you need to know on your home buying journey. Ooh, that’s next month on Money, I’m Home! Thanks so much for joining us, Josh and David, and thank you, Jake Esselink, for all your production skills. And we will see you in the New Year. Money, I’m Home! With Consumers Credit Union.

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