Rising Mortgage Rates are Putting Pressure on Buyer Demand

Rising mortgage rates are putting pressure on buyer demand. It is important to note that not all loans are created equally. Currently conforming loan rates are higher than jumbo loan rates and rates can widely differ for 30 year fixed products vs ARMs (adjustable rate mortgages). The 2022 Conforming Limit is $647,200 and goes up to $970,800 for high-cost counties, like New York City, for one-unit properties. Jumbo loan limits in New York City are loans above $970,800. 

The 

Stacey Froelich Team works with the best mortgage professionals in the industry. We asked our most trusted lenders at Wells Fargo, Citi-bank, Citizens bank and Guaranteed Rate to lay out the unique products their bank’s have put in place to help buyers during this period of transition.

Wells Fargo:

• Currently, our standard rate lock for purchase transactions in NYC is 120 days (4 months) from the time they lock in. We can lock in the interest rate once we have a fully executed contract of sale OR once they have an accepted offer and can confirm that their expected closing date is within the expiration timeframe of the rate lock period; Rate Lock Information | Wells Fargo

• We offer a really robust long term rate lock program for new construction called BuilderBest which allows buyers to lock in rates for an extended period of time. For conforming loans we can lock in rates for up to 1 year and for non-conforming loan (jumbo) we can lock in for up to two years. There are fees and costs incurred for the BuilderBest program but in a rising rate environment, it has proven to be very helpful

• We have relationship pricing; Mortgage interest rate discount - flyer (wfhmconsumerevents.com)

• We allow customers to reprice their rates after they lock in to the current market if rates go down. There is a cost to do this which is currently a fee due at closing of 0.375% of the amount being financed

ADAM W. TURKEWITZ

NMLSR ID 32900

Wells Fargo Home Mortgage

MAC J0161-320

Tel 212-214-7878

Cell 917-574-6040

Adam.W.Turkewitz@WellsFargo.com

Citibank:

• Citibank provides the best in the industry relationship pricing model based on available balances prior to closing. Based on the eligible tiers these discounts provide below market rates to customers of the bank and new customers alike and ultimately allows the buyer to qualify for a higher mortgage due to the lower rates.

   

• Citibank currently offers the 60-day rate lock pricing model to all loans with no extension fees. We also provide the 60-day rate lock pricing for 90 days on co-ops as the process takes longer due to the co-op board approval process.

   

• For clients who must close on the purchase prior to selling their current property Citibank offers the buy now/sell later underwriting approach. As long as the current property is actively listed we will ignore the liabilities associated with that property. This opens up the opportunity to leverage the full financing capability of the buyer’s total income and debt ratio.

   

• Refinance rates are significantly higher than purchase rates. For clients who are forced to close in cash due to timing issues we offer the cash recoup program which allows the buyer to apply for a refinance to “cash-out” the amount he/she paid out of pocket at a rate more consistent with a purchase transaction.

• In this tight market the best tool a potential buyer has is a mortgage pre-approval from an actual underwriter. Most transactions are requiring the buyer to sign a no-mortgage contingency which can be a stressful thought process. Knowing how much you qualify for and to hear from an underwriter who has reviewed your credit report, income and asset documentation allows you to move forward with confidence and less stress.

Brian Cowen

Home Lending Officer

Citibank, NA- NYC Division

Phone 917-406-5245

NMLS ID 727327

[email protected]

Citizens:

• Lock and shop- no accepted offer or property address required. At the time of pre approval we allow clients to lock in the rate for 90 days but require that by day 30 we have a property address to keep the rate lock valid. Most lenders don’t allow this.

• Relationship pricing- we can discount the rate by .375% for new or existing citizens clients

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  Construction to Perm - this allows clients to do a gut renovation, rehab or ground up project- most lenders do NOT have this product

• 90% financing up to 3MM- most lenders will only do 80%

• NON warrantable COOP & CONDO program up to 80%- when buildings in NYC don’t conform to Fannie Mae guidelines lenders typically decline the loan or require bigger down payments such as 30-40%- we will still do the loan with 20% down if the project is NON warrantable 

Steven Breznicky

Senior Mortgage Banker

NMLS ID# 67934

Mobile: 914-874-7844

Steven.Breznicky@citizensbank.com 

Guaranteed Rate:

• Our standard lock is 60 days with most investors and 90 days as we sell to different local lenders who have different rate lock policies depending on the product

• We offer a free float down on our products. So if the rate drops by ¼ the client will get the lower of the rates %

• We will free refinance any COOP at no cost to the borrower provided that it is more than 4 months after the original closing date

  *There are no prepayment penalties on any loans thus no penalty to refinance any property at any point in time

• ARM Rates are currently the most aggressively price type of products and offer a significantly lower payment that the fixed rate options, with 3/1, 5/1, 5/5, 7/1, 10/1 ARMS all offering lower rates than the current 30 year fixed option

   

Jonathan Semon

VP of Mortgage Lending

[email protected]

www.rate.com/jonathansemon

O: (212) 745-9074