Buying a home is a complex and often frustrating process. Twenty-five-year mortgage veteran, who is also a builder in her own right, Patti Frank, deep dives into the whats and hows of securing a mortgage on the East End and why using a mortgage broker can make the process a smooth one.
You work for GuardHill Financial Corp. Tell us about the company and why you chose to work for them.
I have been in the mortgage business for 25 years. In 1994, I started as a mortgage broker. I always preferred being a broker instead of working for one particular bank because it allowed me to have a plethora of product options for my clients. When you work for one bank, they typically only have three or four loan options. However, when you are a mortgage broker, you have myriad options, because you are a third-party broker that can use numerous banks.
In 2014, I chose to join GuardHill Financial because of its stellar reputation in the industry and because after the mortgage crisis of 2008, the U.S. mortgage industry changed drastically. Joining GuardHill Financial allowed me to go from brokering loans to banking loans.
GuardHill Financial is one of the nation’s leading privately held mortgage banker and brokerage firms and has been in business since 1992. We fund our own loans, underwrite our own loans, and have a wide array of products and rates that most of the big banks do not offer. Since we underwrite our clients’ loans in our New York City headquarters, I am in a position to be hands-on throughout the entire process, which allows me to keep clients, their realtors, attorneys, and accountants up to date on how the loan is moving along.
As a correspondent lender, we have a large in-house administrative staff for processing and underwriting our loans quickly and professionally as well as a dedicated closing department, which makes the loan process to the borrower exemplary and efficient. GuardHill is always striving to have the best service, rates, and products in the industry.
You’re very well-known in the Hamptons despite GuardHill being based in Manhattan. Do they have a satellite office here?
Yes. GuardHill opened an office over four years ago at 63 Main Street in Southampton. While I reside in Sag Harbor, I like having an office presence in Southampton. I have also had the same cellphone number since I started in the mortgage industry so my clients can always find me.
I also rely heavily on GuardHill Financial’s operations staff in our NYC office. I would not be as successful as I have been without them, as they are the best in the industry.
How did the market crash of 2008 affect your business?
Like everyone who went through the market crash of 2008, I needed to quickly adapt to the changing environment, and in the mortgage industry, it was changing on a daily basis. Investment banks were collapsing, and housing prices plummeted. At first, 2008-2009 was a very busy time for me, because housing prices were dropping. Therefore, many investors were coming into the market to purchase the numerous properties flooding the market, some at real bargain prices. I had to keep up daily with the products that were being discontinued and find the best products still available for my clients’ needs. Rates were also dropping, so I followed up with my clients from the past 20 years to see if refinancing would make sense for them.
How’s the current Hamptons real estate market from your point of view?
The first quarter of 2019 was stronger than expected and the market seems to have picked up more so in last month. However, I believe we are still in a buyer’s market. Today’s buyers are very educated about the market and more selective in their searches.
Interest rates have ticked back down as of late, so I have seen more buying action. Rates are still the lowest they have been in 30 years, so now is a great time to get into Hamptons real estate. I believe that real estate in the Hamptons can be a great investment for many people.
What exactly does a mortgage loan officer do? And why is it important to use one?
A good mortgage loan officer acts as an advisor and guides a client through the loan process. A loan officer that works for a mortgage banker, such as GuardHill, has access to numerous lenders/banks and all the products they have to offer. We are also able to pre-qualify or pre-approve a client within a day or two for a mortgage. Some banks can take 30 to 60 days to get you an answer, and if it is negative, you are back to the drawing board.
I also like to meet with clients and get their paperwork in order to conduct an income, asset, and credit analysis to determine what they may qualify for, and which product is best suited for their needs. I can also advise them about what needs to be done in order to get themselves into a positive place for a mortgage approval.
So, what happens if you don’t use a loan officer?
If you choose not to use a mortgage banker, you are narrowing the field of opportunity drastically. For the past 25 years, I have successfully researched the best options available in the industry for my clients. I have also built long-term successful relationships with many lenders, and my years of knowledge and solid track record of successful mortgages with them is a huge benefit to my clients.
Why are mortgage rates constantly changing?
Everything that goes up must come down and vice versa. Many factors can push rates up or down, borrowers’ demand for money and the lenders’ supply can impact interest rates. If the economy is doing well, interest rates change. If the economy is doing poorly, people tend to turn to investing in bonds for safety. When the increase in bond purchases rise, the associated yield falls and so do mortgage rates. When the economy is doing well, people start investing in stocks, which push bond prices down and yield up, which in turn, pushes interest rates higher.
Inflation or anticipated inflation also causes rates to increase. Economic boom can also increase interest rates. However, in recent years, The Federal Reserve has kept interest rates low because they want to increase borrowing and investment in the U.S. economy.
What are rates, fees, and points?
The interest rate is the amount a lender charges for borrowing the money. When interest rates are lower, people have more borrowing power and are more apt to buy homes, refinance to fix their homes up, or take money out for college educations, retirement, and estate planning, or even to purchase additional properties.
Fees are costs associated with obtaining a loan and discount points are costs you can pay to buy the rate down. Buying down the rate can lower your monthly mortgage payment. It is important to ask your loan officer if there are discount points associated with the loan.
What is most important is getting educated by your loan officer based on your particular income, asset, and credit situation, and picking the best product for your needs. The interest rate, fees, and points (if applicable) are all costs associated with obtaining a loan. As such, they all should be considered when deciding which lender to use and which product to choose.
Sometimes paying points to buy the rate down is a great option if you plan on staying in a home for a significant amount of time. Sometimes, in order to get a particular product, like a fully amortizing ARM or interest only ARM, you might have to pay points. With some lenders, you may have to pay a point or a portion of a point to have monthly escrows for real estate taxes and insurance waived.
What top factors determine if someone gets a loan?
• Your credit
• Current debt & the monthly payments
• Payment history and late payments
• Income and employment history
• Are you a W-2 or self-employed?
• Debt to income ratio
• Your assets
• The size of your down payment
• The occupancy type
• Will the property be used as a primary residence, second home, or investment property?
With 25 years in the mortgage industry, I have seen and heard every mortgage scenario and I am well-equipped with the knowledge and experience to advise on what needs to be done to get clients approved for a mortgage.
To reach Frank or inquire about her services, call 631-287-4522 or email email@example.com.
This interview will continue in next week’s Real Realty.