As the Spokane real estate market continues to heat up, lenders here at The Advisors Mortgage Co. say they’re preparing for added competition in mortgage loans.
“The current market is definitely a seller’s market,” says Blaine Rolstad, branch manager for the company’s Spokane office, located at 804 W. Boone.
“Inventory is low, so it’s a good time to sell, and that’s why it’s important for buyers to have their finances lined up, and get preapproval for a loan ahead of time,” he says.
In addition to a tight inventory, Rolstad says mortgage lenders also are concerned with mortgage rates, which are expected to rise again, although he says it’s hard to predict just how much they’ll rise this year.
“The biggest concern regarding the rise in interest rates is affordability of homes,” he says. “The higher the interest rates, the higher the mortgage payment, which may impact what a buyer’s affordability may be. But interest rates are still very low, and it’s a great time to buy.”
Founded in 1997, The Advisors Mortgage Co. is a division of American Pacific Mortgage Corp, a Roseville, Calif.-based company that provides retail mortgage lending and branching services in 16 states, including Washington.
The Advisors is based in Yakima, but also has offices in Kirkland and Ellensburg, as well as its Spokane office, which opened in April of 2014.
Rolstad says the company handles all aspects of residential lending and offers conventional, Federal Housing Administration, U.S. Department of Veteran Affairs, and U.S. Department of Agriculture loans.
“Right now, I would say our two most popular lending services are for FHA or conventional loans, mostly because there are a lot of first-time home buyers in this market,” he says. “We’ve also noticed younger people buying sooner, because they recognize it’s more cost effective to own a home than it is to rent.”
According to Rolstad, funding for loans comes from a warehouse line of credit through The Advisors’ parent company, American Pacific Mortgage.
“They fund the loans, then they’re sold on the secondary market,” he says. “Lenders get paid off the branch fees and the service release premium based on volume and number of units.”
Although he declines to disclose specific numbers, Rolstad says last year the company’s loan volume increased by about 20 percent over 2015.
“This year with low inventory of homes for sale and an expected rise in interest rates, it will get competitive,” he says. “Because of those factors, I expect our loan volume will be down a bit from 2016.”
Although most mortgage lenders work individually, or perhaps with an assistant, Rolstad prefers to work as part of a team with fellow licensed lender Whitney Konkright. Together the two comprise what’s called the Blaine Rolstad Production Team.
“Because we’re both licensed lenders, we can work on things simultaneously,” Konkright says. “We have two sets of eyes on everything, and two points of contact for better communication.”
Konkright and Rolstad are two of the three lenders the company has at its Spokane office, along with five other staff members. Both lenders say working together helps them to stay more competitive.
“We pride ourselves on our level of communication with our clients and referral partners, and the ability to have access to both of us at all times is a big benefit to them,” says Rolstad. “Our differences also help us relate to a variety of clients.”
Although Rolstad has been in the lending industry for 20 years, he admits it wasn’t his first career choice.
“I attended Western Washington University, earning a bachelor’s in psychology,” he says. “It still comes in handy sometimes.”
After completing his degree, he joined a finance company in Yakima, transferring to the Spokane area in 1997. “Some of my colleagues decided to get into the mortgage business, and I decided to follow,” he says. “This will be my third year with The Advisors.”
Konkright holds an associate’s degree from Spokane Community College and has been working with the company for just over a year.
She says she became a licensed lender five years ago, having developed an interest in lending as part of the office staff at another local mortgage company.
“I love learning and quickly discovered that I wanted to be licensed and go out and network and help bring in business,” she says. “As I was getting licensed, Blaine had just begun searching for someone to come in and help as his business was thriving. We have similar goals and quickly decided we’d make a good team.”
Rolstad and Konkright say as a team they see all different types of clients, assisting between 10 to 15 new clients each month.
Rolstad says most clients considering a home loan want to know three main things: how much they’ll need for a down payment, how much their monthly payments will be, and how much credit they need to have established.
“Whenever you’re considering buying a home, it’s important to start with a lender so you have an idea of your price range,” he says. “I think a lot of people are just a bit scared to find out, because they assume they’ll need a 20 percent down payment, but that’s not necessarily true anymore.”
In addition to seeing more first-time home buyers, Rolstad and Konkright say they’ve also noticed more cash buyers and investors competing with those buyers for lower-priced, fixer-upper style properties.
Unlike first-time home buyers, cash buyers and investors are able to purchase a property without the need for conventional financing, after which they can renovate and resell it at a higher value.
“Cash buyers and investors add to home values, which we were already seeing increase due to the low inventory,” says Rolstad.
The two lenders say data from the Spokane Association of Realtors show the average closed price for homes has gone up 2.7 percent this year, to $205,077 in February from $199,636 in the year-earlier month.
Rolstad says with the average home price here being in the $200,000 range, most clients he sees can come up with 3 percent to 20 percent for a down payment, depending on which loan program they choose.
“Everyone’s situation is a bit different, and there are many different options,” he says. “Our goal is to find the one that works best for the client.”
Konkright adds, “We feel it’s important to be as open and available for calls and questions as we can be. We’re aware the process can seem overwhelming and scary, so we want clients to be able to trust us to walk them through it.”
Konkright says some clients, particularly older clients looking to refinance or downsize, seem surprised at the level of technology that’s now involved in obtaining a home loan.
“I think a lot of them are just surprised there are so many more hoops to jump through than back when they bought their first home,” she says.
“In this industry, things are always changing, both the guidelines for certain loan programs, and how things are processed digitally. There’s a lot more paperwork and verifications involved in lending, with much of it being done online.”
Included in mortgage paperwork are mortgage rate and fee disclosures, which were implemented in October of 2015 by the Consumer Financial Protection Bureau under what’s called the Know Before You Owe mortgage disclosure rule. The rule requires lenders to provide certain forms to help buyers understand the terms of a mortgage before accepting them.
Rolstad points out that many such new regulations are a result of the market crash in 2008.
“Following that, the banks and lenders tightened up a bit,” he says. “We’re just now starting to see some of those lending programs and options open up again. This business is constantly evolving and our goal is to always stay out ahead of the curve.”
Looking ahead, Rolstad and Konkright say that although they’d like to continue to grow their client base, their ultimate goal is to become a trusted lending resource.
“Like most lenders, the goal is to gain market share,” says Rolstad. “But we also want our clients to know we care, and that we’re here for them from start to finish.”
The two lenders say they also plan to join both the Spokane Association of Realtors and the Spokane Mortgage Lender’s Association this year.
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