I recently sat down with my "go to" mortgage professional, Nick Abate, Founder of Berkeley Mortgage. We speak regularly to compare notes and to keep current on trends in our associated industries. Nick has 13 + years in the mortgage industry as a broker and has experience in diverse markets. I've included some important points from our conversation:
Nick, any trends that you are seeing in the mortgage industry? My clients, buyers approved for a mortgage, are finding themselves in bidding wars after making an offer on a property. One client made 5 separate offers this month; just to be outbid every time. This is a function of supply and demand. Right now there is limited supply, so when a property goes on the market, you have 20-30 buyers alerted by their agent. And there is the possibility that there can be 20 or 30 offers for a well priced property. Is there another major factor influencing this Real Estate Market? Interest rates, and they remain at an all time low. Interest rates change multiple times through out a day. When the stock market is in positive territory, interest rates go up and vice versa. Since the start of 2013, the Dow Jones Industrial Average has hit all time highs, in a traditional time, rates should respond to this performance by going up. The Federal Reserve chairman, Ben Bernanke has a major role to this. In order to stimulate and accelerate real estate recovery, Ben Bernanke's solution is to keep interest rates low to attract home buyers. The Federal Reserve under Bernanke's control has been and continues to purchase large quantities of longer-term securities (mortgage's) issued or guaranteed by government-sponsored agencies such as Fannie Mae or Freddie Mac. Eventfully the Federal Reserve will slow down the pace at which they are purchasing these securities which will cause rates to increase. I tell all my clients, "Don't wait for next year, now is the time. Take advantage of these lower interest rates, and house values that will increase over the next few years."
Have you seen an increase in your business? At Berkeley Mortgage, we are in the most active period we have seen in the last five years. We have an increased number of requests for mortgages from buyers. It's a great sign for recovery of the real estate market. We are hopeful that increased consumer confidence will fuel the recovery.
So, what's the first step to getting a mortgage in this market? Call a trusted mortgage professional first and get "pre-approved" to see what amount you qualify for, or what your "spending power" is. At Berkley Mortgage we only process "pre-approval" applications, which is an in-depth look at your finances as compared to just a "pre-qualification" letter. We interview every prospective client about their income, assets, job history and credit. We pull a credit report, but we always ask for specific documents to review the facts. The difference is due diligence. If you have your documents ready, we can turn around the "pre-approval" process in a short period. It's in your best interest to put in the effort and time at this critical stage of the buying process.
Can people contact you to ask questions about the mortgage process? Absolutely, they should call before they find the right house to review what price range they can realistically look at buying. Call me at (914)461-3194 or email to nicka@berkeleymtg.com.
