Loan officer prioritizing two key fundamentals in ultra-competitive market
With plenty of competition among would-be homebuyers in the US housing market thanks to an ongoing lack of inventory, bringing certainty and speed to the mortgage journey is top of mind at present for one leading loan officer.
Shant Banosian (pictured) of Guaranteed Rate told Mortgage Professional America that those factors could give buyers an invaluable edge in the race to have an offer accepted, particularly given the continuing trend of intense bidding wars on properties.
The company’s process entails a precommitment letter up front, with clients’ loans fully underwritten in advance of them having an offer accepted – a so-called “PowerBid” that Banosian said eliminates stress and anxiety at an early stage because the mortgage process is almost done.
“It helps them get their offer accepted because sellers and sellers’ agents have a really tough time distinguishing amongst all the different offers out there,” he explained.
“So if you can [present] a more buttoned-up offer, that adds more certainty to a seller and a seller’s agent and increases the odds of everything being finalized and going from offer to successful closing. They’re more likely to take your offer out of all the different offers out there.”
When it comes to speed, that also means a same-day mortgage process getting loans from application to close in one to two business days, according to Banosian, helping certain offers stand out even more.
“I’m obsessed with helping my clients win and being able to enter the housing market as opposed to being left out of it because they can’t get their offer accepted,” he said.
How are mortgage applications faring amid rising rates?
As interest rates continue to climb – recently hitting their highest levels since the end of 2023 – mortgage applications have taken a hit, with the Mortgage Bankers Association (MBA) noting last week that its Market Composite Index (a measure of mortgage loan application volume) dipped by 2.7% on a week-over-week, seasonally adjusted basis.
Still, mortgage professionals on the ground continue to note an elevated pace of application and homebuying activity with borrowers seemingly accustomed to the high-rate environment of recent times.
Mortgage rates in the US have risen for the fourth consecutive week, reaching an average of 7.17% for 30-year fixed loans.https://t.co/7m4K777J6b
— Mortgage Professional America Magazine (@MPAMagazineUS) April 29, 2024
“From a real estate market standpoint, it’s actually very similar to the last few springs,” Banosian said of the current market. “Rates are elevated, obviously – it’s very similar to what happened in 2020 to 2023. And here we are in 2024: rates are up and the market is still moving very, very fast.
“There’s a lot of demand for homes in the United States. The demand far exceeds the supply and because rates are up, that’s a constraint on inventory because there’s a lot of homeowners that aren’t going to enter the market. They don’t want to leave behind their rates in the twos, threes and fours.”
First-time buyers need all the help they can get in current market
Bidding over asking price, quick closes, and waived contingencies are as common as ever in the current market – which, unsurprisingly, is presenting plenty of hurdles for first-time homebuyers.
Elevated home prices and a glut of qualified competition mean those new buyers are facing as difficult a time as ever securing a property to buy.
“In the lower price points where first-time homebuyers tend to be, those are actually the most competitive situations because that’s where the affordability is the best,” Banosian said. “So it can absolutely be very difficult for a first-time homebuyer.
“I think if you’re a first-time homebuyer it’s very, very important to prepare in advance of getting into the market – I think it’ll be too overwhelming if you jump in only when you find a house that you like. I think you have to do your homework upfront, and understand all the things that go into applying for a mortgage and buying a house.”
That means a clear understanding of financials, budgeting, and the various steps required to ensure a successful bid on a property.
“I think it’s really important to work with a professional – a really great real estate agent that’s going to help you navigate the market,” Banosian said. “It’s also equally as important to work with an amazing loan officer to help you understand your finances, to help navigate this market.”
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