Coffee with Cate: Mortgage Lender

Cate here! Carine and I recently decided to start a series of blog posts showcasing the people typically involved in the sale of a home (besides a real estate agent, of course!). I sat down with Rory O'Donnell to discuss the role of a mortgage lender in the sale of a home and his role within Greenway Mortgage, the lender that Rory holds a position in. Keep reading to learn more!

Can you introduce yourself and give us a bit of background on you?

I am a Branch Manager for Greenway Mortgage’s White Plains, New York Branch. I am licensed in five states which include New Jersey, New York, Pennsylvania, Connecticut, and Florida.

I am an accomplished loan originator with more than 15 years’ experience in the mortgage industry, specializing in all types of mortgage products. I have been with Greenway Mortgage from the beginning and continually rank among its most productive loan officers.

Whether you’re a first-time homebuyer, looking to trade up, deciding to downsize, or simply wishing for a change, I can help you every step of the way.

What is the difference between going to a mortgage lender like Greenway Mortgage and going to a bank?

Working with a local, direct mortgage lender like Greenway Mortgage can come with several advantages over those bigger companies. We’re here with you every step of the way. In fact, working with a mortgage lender for your home finance needs could be the best decision you make. Greenway Mortgage has the products and resources of the big banks with the care, attention, and speed of a local lender.

Here are a few key reasons why you should consider working with us:

1. Competitive Pricing: As a direct local lender, we sell our loans through sophisticated trades to obtain the best-priced investors. This means you'll receive competitive pricing and exceptional service simultaneously.
2. We’re Your Local Experts: We are deeply rooted in your community. Our team, consisting of loan officers and underwriters, understands the unique aspects of the area and how they may impact the home buying process. We leverage this local knowledge to provide you with expert guidance.
3. Customized Loan Solutions: We underwrite our own files and make our own loan decisions, enabling us to deliver personalized attention to all borrowers, particularly those with unique circumstances. We offer a range of customized loan options to suit the needs of each client, whether they're first-time homebuyers, looking to upgrade, refinance, or invest. Additionally, we have local connections to assist with credit improvement or cater to self-employed individuals.
4. Convenience: We don't limit ourselves to traditional banking hours. Our Loan Officers are flexible and can schedule appointments at a time and location that suits your convenience.
5. Personalized Service and Lifelong Relationships: The Greenway Team is committed to keeping you fully informed at every step of the process. Our dedication extends beyond the closing table, fostering lifelong relationships with our clients.
6. Timely Closings: We lend our own money, and we guarantee that closings occur on time. With big banks, you’re just a number and can easily get lost in the shuffle. Brokers, as intermediaries, shop your file around to multiple lenders in search of the best rate and program for you. However, this process often leads to delays since brokers lack direct influence over your loan file. Since we have direct control over your loan file, you can expect a smoother and more efficient closing process.

What is your advice for first time buyers?

Remember, the time to buy is when you’re ready! Here are a few things to consider:

1. Save for a down payment. Aim to save at least 20% of the home's purchase price for a conventional loan to avoid private mortgage insurance (PMI). If you can't save that much, we have a variety of loan programs that offer lower down payment options.
2. Before looking for homes make sure to get pre-approved first.
3. Determine and stick to your budget. Have you crunched the numbers yet to see how much you can afford? If you’re unsure of your magic number, reach out! I can look at your finances and assess what you can borrow.
4. Be sure to check your credit score. Your credit score will determine whether you qualify for a mortgage and affect the interest rate lenders will offer. Having a higher score will generally get you a lower rate.
5. Narrow down your ideal type of house and neighborhood. Write a list of all your wants and needs. When you find a potential house, be sure to take a drive around the neighborhood, visit open houses, check every nook and cranny, and come back at various times of the day. 
6. Explore mortgage options with your lender. We have a variety of mortgages available with varying down payment and eligibility requirements. You may just be surprised at what you may qualify for!
7. Don’t skip the home inspection. A home inspection is crucial to uncover any hidden issues or potential problems with the property. Don't be tempted to skip this step, even in competitive markets. The inspection report will help you make an informed decision and potentially negotiate repairs or price adjustments.
8. Consider a Condo or a Townhouse. Condos and Townhouses make great starter homes. In fact, they’ll help you build equity to fuel a move when you’re ready!
9. Stay patient and flexible. The home buying process can sometimes be challenging and time-consuming. Be patient and remain flexible throughout the process. It may take time to find the right home, secure financing, and navigate the closing process. Remember, it's better to wait for the right opportunity than rush into a decision you may regret.
10. Ask questions. Familiarize yourself with the home buying process, including the various documents, contracts, and timelines involved. Don’t be afraid to ask questions, seek guidance, and ensure you fully understand your obligations as a buyer.

Do you recommend that buyers consider an ARM right now with rates being higher?

Whether to consider an adjustable-rate mortgage (ARM) or a fixed rate mortgage is a decision that depends on various factors, including a borrower’s financial situation, risk tolerance, and long-term plans. In a rising interest rate environment, it's important to carefully evaluate the implications of an ARM. They typically have an initial fixed-rate period followed by periodic adjustments based on market conditions. While the initial fixed rate may be lower than fixed-rate mortgages, there is the potential for the interest rate to increase in the future.

For some, an adjustable-rate mortgage (ARM) is an automatic no. When this is the case, it is usually for one of the 3 reasons.

1. They are uncomfortable with any risk.
2. They are unaware of how a Hybrid ARM works.
3. They can predict the future with relative certainty.

For others, an ARM is a valuable financial tool. It is a fixed rate loan for the first 3,5,7 or 10 years. During the fixed period, there is no risk and typically healthy savings. Having reasonable expectations for future sales or refinancing is all it takes to make a Hybrid ARM worth considering. At least, it can be eye-opening to consider the possible benefits.

The housing market and interest rates are unpredictable. I would suggest speaking with your mortgage lender to see if an ARM makes sense for you and your specific scenario. We can show you the difference.

What is a point? Do you recommend them right now?

A discount point (or point) is a fee paid by the borrower at closing to reduce the interest rate. A point equals 1% of the loan amount.

If a borrower can afford to buy them, then the decision whether to pay points comes down to whether you will keep the mortgage past the “break-even point”. The break-even point is when the accumulated monthly savings equal the upfront fee. After that, you’ll come out ahead. If you were to sell the home or refinance the mortgage before hitting the break-even point, you lose money on the discount points you paid. The break-even point varies, depending on loan size, interest rate and term.

Discount points make sense when you’re buying a long-term investment property or a home you plan to hold onto for many years.

What can a buyer expect for closing costs?

On average, costs such as the appraisal, underwriting, title agent, taxes, insurance, and attorney fees can add up to 2-5 percent of the purchase price of your home. Take for instance this example here:

• You’ve found a home for $500,000.
• Your closing costs (based on the 2%-5% Freddie Mac estimate) could be between $10,000 and $25,000.

Keep in mind that if you’re in the market for a home above or below this price range, your closing costs will be higher or lower.

Depending on the value of the home in relation to the purchase price you have agreed on with the seller, you may be able to secure a seller concession to help cover these costs. You should discuss this with your realtor, attorney, and lender before finalizing the contract.

Closing Costs Cover Things Like:

• Government recording costs
• Appraisal fees
• Credit report fees
• Lender origination fees
• Title services
• Tax service fees
• Survey fees
• Attorney fees
• Underwriting Fees & Processing Fees
• Escrow
• Home Inspection
• Property tax
• Private Mortgage Insurance (PMI)

What documents should a buyer have on hand when they are looking to get pre-approved?

Some commonly requested items for a mortgage pre-approval are:

1. BORROWER IDENTIFICATION - A state-issued photo ID driver’s license or identification card. A valid passport will also suffice.

2. TAX DOCUMENTS - This is a standard document for mortgage pre-approval. So, there's a 99% chance you will have to provide tax documentation at some point. Most lenders want to see your W-2 statements and tax returns for the last two years. Among other things, your W-2s show how much money you earned over the previous year(s).

3. BANK ACCOUNT INFORMATION - Your lender will review 2 months of bank statements for each of your bank accounts. Make sure to include investment account statements and all pages of your statement, even if they are blank.

4. PROOF OF INCOME - These mortgage documents are needed to validate your income for pre-approval and underwriting. Usually, it’s your two most recent pay stubs.

5. EMPLOYMENT VERIFICATION - You will need to provide the names and addresses of previous employers over the last 2 years.

6. PLACE OF RESIDENCE - This one is self-explanatory. For pre-approval and underwriting purposes, the lender wants to know where you've lived for the last couple of years. If you currently rent, you will be required to provide your landlords name and address over the last 2 years.

7. SELF-EMPLOYED DOCUMENTS - Do you run your own business? If so, you might have to provide some additional documents during the mortgage pre-approval process. This might include balance sheets, a profit-and-loss (P&L) statement, or federal tax statements for the last two years.

8. REALTOR AND ATTORNEY CONTACT INFORMATION

Note: This is just a generic list of mortgage pre-approval documents. It includes some of the most requested items. Depending on your situation -- and the type of home loan you are using -- you might be asked to provide additional documents that are not on this list.

Finally, what separates you from other mortgage lenders?

Who we are: We are a full-service, direct mortgage lender committed to our clients as well as to the environment. Simply put, we combine the future of mortgage lending technology with the traditional service and experience you deserve.

Our Mission: We provide clients with a lending experience that’s second to none all while promoting green initiatives, employ polices focused on preserving the environment and remain active and respected in the communities we serve.

Why Greenway?

1. Local People, Local Business, Local Service
2. Full-Service Direct Mortgage Lender with a highly experienced team
3. Personalized service and customized loan solutions
4. Competitive rates and fast closings
5. We give back by donating 5% of our annual profits to local and regional environmental groups and causes.

For more information about Greenway Mortgage, please don't hesitate to contact Rory O'Donnell at [email protected] or find more information online at https://greenwaymortgage.com/.