Getting a mortgage this spring means enduring long waits for loan approvals and navigating tighter standards from skittish lenders, who are working overtime processing a flood of applications due to record low mortgage rates.
Bankrate spoke with Jennifer Kouchis, senior vice president of real estate lending at VyStar Credit Union in Jacksonville, about how borrowers can save time and money when they get a new mortgage or refinance. VyStar has $9 billion in assets and is the largest mortgage lender in Northeast Florida.
What’s the biggest mistake you see borrowers making?
Kouchis: The biggest mistake is not really understanding where they are in their current state. Sometimes, members will see a house of their dreams before they get prequalified. That’s difficult because guess what — once you see the most expensive home, you don’t want to go to something in your price range.
What advice do you give borrowers about managing their credit scores?
Kouchis: Right now, maybe not everybody has a ton of extra cash lying around to pay off debt. But one thing we advise members is whatever your high debt is, get that below 50 percent of the credit limit. That can improve your credit score quickly.
Another mistake people make is they start paying off debts and close accounts without talking to someone. You want to pay down debt, but you want to keep accounts open so we can review your trade lines. We’ll see people get gung ho and pay off all their accounts and close them. That can cause your credit score to fall. I tell members, “Pay it off, but don’t close everything.”
How has your mortgage business changed over the past few months?
Kouchis: We’re seeing a lot of increased volume. Some of it has to do with members who are seeing lower rates. Members who weren’t necessarily affected by the pandemic have been taking advantage of lower rates. A lot of our competitors have made the decision to pull out of certain products, such as equity lines and jumbo loans. We decided we didn’t want to do that. We felt like there was a way to be thoughtful about it.
We’ve strengthened some of our guidelines without eliminating those products entirely. We’ve asked for some additional guidelines, or we’ve lowered limits. We just feel good about being able to have those products. Some people are pulling out equity because they want to have cash on hand, or they want to put in a pool or do improvements. Foreclosures could saturate in the future, so we want to be careful about what loan to value limits are.
How are you handling the increase in volume?
Kouchis: Our pipeline has not slowed down. We’ve definitely picked up members. We have an automated system that allows us to do electronic approval of documents. We’re definitely leveraging technology. We’ve done Superhero Saturdays where we’ve had team members come in on weekends to help with the volume. We got volunteers from processing and underwriting and our sales staff to go in and scrub files and call members. We’re doing whatever we can to move the loans forward in the process.
In the past two Saturdays, we were able to get through 310 files. Members have been really appreciative of that. We’re doing whatever we can. We’ve been paying some overtime. We are on extended turn times, just like a lot of our competitors. We’re probably 20 days to 30 days longer than we are typically. We’re starting to phase back into the office, so we’re starting to see that number come back down.
Where do you see rates going for the rest of the year?
Kouchis: I think rates are going to stay pretty firm for the rest of the year. There’s going to be some up and down. The Fed is going to work closely to keep everything in line. They might move here and there, but I don’t see any big changes in rates. And we’re going to stay firm with our product offering. We’re not going to take anything away.
What else should borrowers think about in the current environment?
Kouchis: A lot of people have asked, “Is now a good time to refinance? Is it a good time to buy?” Yes, if you’re in a position to refinance or buy. Rates are really low, and now is a really great time. Some are waiting to see if rates are going to get any lower. Is it really going to get that much better? Maybe, but not that much better.
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