Tune into this episode of Money, I’m Home as Lynne is joined by Consumers mortgage experts David Pendley and Josh Summerfield to discuss the spring housing market, including a few tips on how to navigate it.

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0:00:06.7 Lynne Jarman-Johnson (LJJ): Money, I’m home. Welcome in. I’m Lynne Jarman-Johnson with Consumers Credit Union from finance to fitness, we do have it all. And you know what, we love featuring, especially this time of year, the mortgage industry, what’s going on with your home buying experience and what we need to help you do to get into the home of your dreams. Joining us today is David Pendley and Josh Summerfield. They are our leaders at Consumers Credit Union for mortgages. I’ll tell you what a topsy-turvy time of year it is, David, let’s start with you because springtime means… And you guys, I think spring is actually coming to Michigan. All of a sudden and people start to want to move, don’t they? What’s going on?

0:00:48.6 David Pendley (DP): Yeah, the weather breaks in Michigan. And then right away, you start looking at your house or living circumstances, and then you start looking around saying, What if? What could we do? So, it’s a very interesting time. I’ve done this for many, many, many years. And this is a very, very interesting market we’re heading into. I’m looking forward to talking about it.

0:01:11.6 LJJ: You know, Josh, one of the things that I’ve been reading about is just the mark, obviously there’s been some higher interest rates, but then they kind of seemed to go down a little bit and they come back like it’s an everyday occurrence. And I’ve been reading about the word resiliency, like how is the market resilient. What does that mean in your space?

0:01:31.3 Josh Summerfield (JS): Yeah, that’s an interesting term, right. Look at a lot of different ways, buyers being resilient, battling through all the fights and trying to find a listing that they could win on when they’re submitting their offers. We’ve got a lot of people that have carried over their pre-approvals from last year until into the winter, and now with the spring, and hopefully we’ll continue to see more homes on the market. So, they’re fighting along the way, and then with the rates it’s still not a bad time to buy with rates. It’s still great, historically low overall interest rates. And it’s just about finding the right fit for you. So, you’re in the right loan and feel comfortable with the payment as you find that house this spring.

0:02:14.3 LJJ: So David, when it becomes the spring home buying market, obviously the realtors are out there pushing, our mortgage loan officers are working overtime to try to make sure that we get those pre-approvals in and get people to be able to look, what are you seeing in the industry that is kind of making you kind of tilt your head a little bit as far as helping the homebuyer?

0:02:37.6 DP: It’s interesting right now, what would really help the homebuyer right now is inventory. It’s fascinating right now, so a lot of people here’s what they’re doing, literally, they’re doing this, they’re looking at homes, they’re not seeing much in the market, and then they’re also looking in interest rates, and they’re like 6.5%, 6.25%, 6.75%. No, we’re not doing anything, we’re going to sit at a 3% rate, but here’s what they don’t know, this lack of inventory is creating another wave of prices that are creating a little euphoria. Just in the last 24 hours, I’ve heard of house is selling for $30,000, $40,000, $50,000 more than the list price, so while you may give up a little bit on the interest rate, you may get a price for your house you never thought you could get.

0:03:25.6 DP: So, if you are at all considering it, obviously talk to a loan officer as far what you qualify for, but maybe talk to a great realtor and say, “What can I potentially get if I was going to do a reset of my living circumstances. What can I possibly get from my house?” because it may shock you because good houses are selling for good money right now. It’s phenomenally interesting.

0:03:49.1 LJJ: I think back when it was really, really tight and it’s very tight now, but I’ve heard that the actual bidding wars aren’t quite as high as they used to be. But Josh, when someone who’s looking at, you know, I’m thinking about putting my house up for sale, there’s a worry that they’re not going to find another house. How do you put that into play to where, when are we going to get back into a cycle that my goodness, the inventory is at least high enough that I’m interested to look?

0:04:17.4 JS: That’s a great point. You got to be prepared as you go into the whole searching process, “Okay, do I need to sell my house first or can I keep it until I find something? Maybe I don’t want to list right away because I’m scared I’m not going to find something in time to be able to move into it, and then I’m going to not have a place to go,” right? So talking to the loan officers about what that process looks like, what can you actually potentially afford to carry both payments for a little while if you had to so you don’t put yourself in the position of not having a place to go to if you sell your house quick, because the reality is, homes are still selling pretty quick, so you shouldn’t really have the fear of not being able to sell your house that you’re leaving. It’s just making sure you’re prepared as you’re looking for that next one.

0:05:00.3 LJJ: Well, next month, we’re going to talk about being able to afford your house and how those different payments, we’re talking… You’re focusing on. I love to talk about the fact that people… And you got something up, Josh that I had not thought of. David, tell me about the pre-approval process, and then do you have to re-apply after certain days, or when is it that you have to and how does that affect your credit?

0:05:23.8 DP: If I was a home buyer now, considering buying a home, and maybe I have a house to sell, and to answer the quandary that was put before us, like what happens if my house sells and nowhere to go? I would sit down with one of our loan officers right now, I would get pre-approved, I would also get pre-approved for a bridge loan and maybe, maybe not list my house yet until I find my dream home and I’m already approved. I can buy it no matter what, even if my house doesn’t sell, but I have that in place. What’s interesting about bridge loans, especially the ones we have done over the last 36 months, we write them and we almost never need them, because the house sells on time or we only need it for a week or whatever. But it does give you the freedom to comfortably go out, look at houses, find your dream house and say, “Okay, now is the time we’re going to go sell our house.” As far as a pre-approval, yeah, come in with one of our loan officers. Go over the numbers on today’s rates with a potential purchase price, something you’re considering. Josh, you might be able to answer this better. Josh is much better with the tactical stuff.

0:06:23.0 JS: Yes, that’s when we look at refreshing your pre-approval, and we’re fortunate to have some great products out there, especially with the interest rates, as far as our lock and shop program and being able to lock in an interest rate now and kind of protect yourself from the market a little bit as you’re looking for those places. When that 90 days comes up, and then we kind of refresh that pre-approval and can do a new lock and shop based on current market rates, but yeah, that’s the time period we look at.

0:06:51.8 LJJ: So David, real quickly, when we’re looking at applications, I had read an article that in late February, the applications actually were down at one of the lowest points in 10, 15 years. Are you seeing that that changes as spring hits?

0:07:11.3 DP: I’m hoping it changes this spring hits but it’s just about inventory. We got the buyers man, there’s an abundance of buyers. We will have a very robust spring market, if they come out, part of the application is they’re also comparing it to the refinance applications over the last three to five years, and those are gone. We’re doing almost no re-finances for obvious reasons, but the purchase applications, there’s going to be buyers ready to buy your house.

0:07:41.2 JS: We have a great amount of pre-approvals out there, so those applications are still coming in, its just the purchase agreement part that we got to get, and that’s the inventory piece that David’s speaking to.

0:07:50.6 LJJ: Well, we’re going to do next month a little bit deeper in buying that home and all of the different options that are available, especially now that it is spring, and who knows, maybe the inventory will change a little bit. But if it doesn’t, we can still help you get that house up. Hey David and Josh, thanks so much.

0:08:08.1 DP: Thank you, Lynne.

0:08:09.6 JS: I appreciate you having us.

0:08:10.0 LJJ: Hey, thank you. Jake Esselink, our producer. He does a wonderful job editing, and we’d like to thank you for listening. If you have a topic or you know what you’re looking for a house just get in touch with Consumers Credit Union. I’m Lynne Jarman-Johnson. Hey, money, I’m home. From finance to fitness, we’ve got it all. Have a great week.

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