By Susan Roush

Pages 12-14 May/June 2017 Issue

Just two months ago, the National Association of Home Builders/Wells Fargo builder sentiment survey showed the highest level of builder confidence since 2005. This level has retreated slightly, but new home sales continue to be robust.  There is the possibility of one or two more interest rate hikes from the Federal Reserve between now and the end of the year, which affects bank loan rates to consumers. A half of a percentage point of interest on a $200,000 mortgage, for example, represents a difference of $20,000 or more over a 30-year mortgage. For those ready to build, buy, or refinance a house, locking in a rate sooner than later is smart. Homeowners wanting to remodel have choices. Fixed-rate home equity loans are set by supply and demand market forces and do not react as directly to Federal Reserve moves. Home equity lines of credit loans, often used to make improvements, have variable rates linked to the prime rate, which do rise with Fed increases.  Building Industry Synergy spoke with two local mortgage experts about their products and services.

Trippett Boineau

Citizens One Home Loans is the mortgage-lending arm of Citizens Bank, the 12th largest bank in the country, founded in 1826 out of Providence, RI. Senior Mortgage Loan Officer, Trippett Boineau, said, “We treat every loan, every customer, the same with the goal to get to closing with as few hassles, complications, and issues as we can. We have a good solid reputation for delivering on time and quality service as well.” Trippett has been in the industry since the first mortgage brokerage company came to South Carolina in 1981 and he is a current member of the Horry Georgetown Home Builders Association ( HGHBA ). Citizens has been offering Construction-to-Permanent loans for a long time, and since there is only one closing, this type of loan saves time and money. Here is a summary of Citizens One Home Loans distinguishing characteristics:

• Choice of fixed rate loan or adjustable-rate mortgage (ARM)
• Up to 90% financing on primary homes; 80% on second homes, and lot financing can be included in the loan
• Borrower is only required to make interest payments during construction (calculated on dispersed funds)
• Interest rate is locked in upfront for 60 days and borrowers have 12 months to build
• Once interest rate is locked, the rate stays the same for the life of the loan
• Loans are available to renovate an existing home, including tear downs to rebuild
• Citizens does not sell their loans,  they keep and service everything they do within the Citizens’ footprint

In terms of choosing the right bank or mortgage company, Trippett advises consumers to check the background of the lender and their reputation among the Realtor and builder community; ask about rate locks and the time it is guaranteed; check the fees on a loan, and ask for the start-to-finish closing time; learn who will service the loan. Trippett Boineau observed that the health of the housing market is excellent. He said, “In terms of transactions, we have returned to 2004 levels.”   He gives credit to the medical industry and all the new medical facilities being built to accommodate the ever-growing retiree population. Citizens even has a loan product tailored especially for medical professionals.

Faith Adams

Atlantic Bay Mortgage Group is not in the construction loan business. Instead, they offer permanent financing and a number of innovative loan products. Mortgage banker Faith Adams, who has 30-years of industry experience and is a current member of the HGHBA, said that they have their own traditional conforming and non-conforming products. Atlantic Bay can broker loans through an affiliate, such as bank-statement only (especially suited to self-employed borrowers) and foreign national loans.  

Two products Atlantic Bay Mortgage Group offer are Renovation Loans and Energy Efficient Mortgages (EEM). Of Renovation Loans, Faith said, “The program is fantastic – it allows a borrower to purchase or refinance an existing home and include within the loan the cost of any substantial repairs / improvements through that single loan. It saves the borrowers thousands of dollars out of pocket.” Renovation loans can be used for repairs / improvements taking more than six months. Installation of luxury items are not covered, such as pools, spas, outdoor kitchens, as those are considered additions not repairs. The down payment is based on the sales price plus the repair costs.  There are two types of Renovation Loans: Standard and Limited, and each require a $5,000 minimum. Other distinctions pertain to the involvement of HUD consultants, architectural exhibits, and financing mortgage payments.  

The EEM is a loan product that can be combined with any FHA program including FHA 203(K) programs, VA programs, or conventional loans. This would include energy-saving improvements such as weatherization, (smart thermostats, insulation, sealing and caulking) and improvements to mechanical systems. It does not include new roofs or purchasing energy efficient appliances.

Faith details the benefits of working with Atlantic Bay Mortgage Group:     

• Some of their credit scoring has reduced criteria giving borrowers some flexibility.
• They offer credit rescoring – a borrower can clean up credit issues and the improvement to their credit is quickly reflected.
• Atlantic Bay does upfront underwriting on a perspective borrower, which protects a builder’s inventory and investment.
• They have a dedicated team. Faith said, “I know who my underwriter is, I know who my processor is… I know who’s working on every loan that I originate – it’s not a finance factory.”
• Atlantic Bay charges a flat rate of $895 with no hidden fees, compared to normal loan origination fees of 1 to 1.5%.  Recently, their rate was lowered 50 basis points, representing significant savings to borrowers.
• With timely cooperation from the borrower, Faith said, “We are very proud of the fact that we can close most loans within 30 days, which is almost unheard of.”
• Atlantic Bay Mortgage Group consistently scores very high with consumer satisfaction surveys.

To sum up, Faith said, “If it makes good sense we can make it happen.”

For further information regarding the above article or to contact one of the mortgage professionals directly call Building Industry Synergy @ (843) 945-4452.