In August 2020, Taylor Lopez and her husband Joseph bought their home for $180,000 in the fast-growing city of Anna.
They bought the three-bedroom house built in 1966 with a loan carrying a 3.8% mortgage rate. “From an investment standpoint, it felt like a good choice,” said Lopez, 36, a real estate manager for restaurant chain Wingstop.
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Dallas-Fort Worth home sales, prices only take slight hit from higher mortgage rates
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After more than two years in the home, they’ve been thinking about selling. Joseph works in Lewisville and Taylor works in Addison, so they would like to find a place offering a shorter commute.
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But, like many other would-be upsizers in Dallas-Fort Worth, the couple feels locked into their current home.
Although they could get a good return on a sale, they would have to shop in a dramatically more expensive housing market than when they first purchased and sacrifice their current loan for a new one at a much higher rate.
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After a wave of low-rate homebuying and refinancing from 2020 to 2022, more than half of outstanding Texas mortgages have rates of less than 4%, according to Federal Housing Finance Agency data.
Since last fall, the average rate for a 30-year, fixed-rate mortgage has been hovering between 6% and 7%.
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“There are people that want to sell, but that is what is keeping them there at their house,” said Misty Michael, a real estate agent in the Sachse and Plano area.
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The Lopez family said any home they would want to buy, in school districts they want to be in and that wouldn’t require a lot of work, would start in the $400,000 range.
“It doesn’t make sense when you weigh out all the pros and cons, so we’re continuing to drive about an hour each way to work,” Lopez said. “We could always purchase a home at a higher interest rate, then refinance it if the interest rates go down, but that’s an if and when situation.
“When you’re playing with that much money, it doesn’t seem like a risk I’m willing to take right now.”
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Changing math
Since the start of 2020, the median price of a single-family home in Dallas-Fort Worth has risen more than 50%, according to North Texas Real Estate Information Systems and the Texas Real Estate Research Center at Texas A&M University.
On top of that, the Federal Reserve has aggressively increased its federal funds rate for more than a year, indirectly driving up mortgage rates. Freddie Mac recorded an average 30-year mortgage rate of 6.96% on July 13.
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The result: The monthly principal and interest payment for a median-priced Dallas-Fort Worth home at the average rate with a 20% down payment, before insurance or property taxes, was about $980 in January 2020. In June, it was more than $2,100.
For buyers who purchased a $300,000 home at the record low of 2.65% in January 2021, just buying a house at the same price again at today’s average rate would add almost $900 to their monthly payments before taxes and insurance.
Purchasing a bigger or nicer home would add significantly more to that already-elevated payment, so people with job promotions or babies on the way looking to upgrade to bigger homes may not find a good enough deal to justify it financially.
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“It now is significantly more expensive to make these marginal changes that you might have been planning,” said Texas A&M economist Adam Perdue. He and his wife are expecting a baby soon and have considered getting a bigger home, but they too have a low rate on their home in Brazos County and don’t want to take on higher monthly payments.
While prices are declining slightly year to year, Texas A&M economists don’t expect them to return to where they were at the beginning of 2020. Rates are also expected to decline, but not back down to the record lows. Mortgage Bankers Association forecasts rates in the 5% range by 2024.
Still buying and selling
As mortgage rates rose and sellers held back, new single-family home listings in Dallas-Fort Worth dropped 22% between June 2022 to June 2023, limiting options for people looking to buy.
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Buyers with an immediate need to move are still purchasing homes, and people continue to move to Texas from other parts of the country. Local home sales recorded in June were down only slightly from a year before.
“We have a ton of buyers that are wanting to buy a home,” Michael said, adding that buyers may choose to refinance later. “You have people getting married, having babies, kids going to college.”
More casual buyers without an immediate need to move may no longer be shopping, said Drew Kayes, who heads up homebuying company Opendoor’s operations in Dallas-Fort Worth and Houston.
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“A lot of those folks right now are not in the market because they’re locked into a sub-4% rate, and that’s more of a luxury move than a necessity move,” Kayes said.
Jason Dickson, co-owner of North Texas-based Nuwave Lending, said while it may be hard for homeowners to leave their current home, it may be worth it for them to tap into equity they’ve built up during the pandemic to pay off credit card debt or auto loans.
“They’ll gladly sign up for the higher interest rate in the new house if they have the benefit of taking that equity and improving their overall financial position,” he said.
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A silver lining
Nipun Gadhok, 31, doesn’t want to lose his 3% rate but hopes to purchase a new home for him and his girlfriend next year.
Gadhok, a development manager for the Nehemiah Co., a local firm behind residential communities throughout Dallas-Fort Worth, purchased his five-bedroom home in Fort Worth’s Augusta Meadows neighborhood in 2021.
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He’s looking to buy a home along the outskirts of the metro area, potentially in one of his company’s developments on the east end of Mesquite. Knowing he has a rate he may never get again, he’s not planning to sell his Fort Worth house.
He intends to keep it as a rental property and is already renting out rooms to four other tenants. With mortgage rates causing many people to rent, that’s turning out to be a good side hustle.
“People are choosing to rent, they are not as much inclined to buy,” Gadhok said. “The rates really helped me out in the way that I’m not having problems with finding tenants.”
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Farm loans help farmers and ranchers start, grow or maintain their farming businesses. These small-business loans can be used to cover operating expenses, purchase livestock, buy farm machinery and agricultural equipment, as well as construct farm buildings, among other purposes.
Loans for farms are available from a range of sources, including government agencies and lenders that specialize in agriculture. The best farm financing for your business will be the most affordable option you can qualify for that meets your needs.
How Much Do You Need?
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Best farm loan options for agricultural businesses
1. Farm Service Agency (FSA) loans
Best for: Low interest rates; the variety of loan options.
Through the U.S. Department of Agriculture (USDA), the FSA offers several types of farm loans. FSA loans can be a good choice for first-time and established farmers alike. These loans have competitive interest rates, long repayment terms and can be used for a range of different purposes. Here are your options:
Direct operating loans. These loans can be used to cover daily operating costs and family living expenses. They can also be used to purchase livestock, seed and equipment. Loans are available in amounts up to $400,000 with repayment terms up to seven years. The FSA sets monthly interest rates — and as of July 2023, the interest rate on these loans is 4.5%
. No down payment is required.
Direct ownership loans. Farm ownership loans are used to buy or expand a farm or ranch. These loans are available in amounts up to $600,000 with repayment terms up to 40 years. As of July 2023, the interest rate on these loans is 4.875%.
Microloans. FSA microloans are designed to provide financing to small and beginning farmers, as well as niche and nontraditional farm operations, such as truck farms, farms participating in direct marketing and sales, and Community Supported Agriculture (CSA). You can choose between an ownership and operating microloan; interest rates and eligible use cases mirror their standard loan counterparts. Funding amounts for either microloan max out at $50,000.
Guaranteed loans. Unlike FSA direct loans, which are issued directly from the agency to the farmer, FSA guaranteed loans work similarly to the SBA loan program. With these farm loans, the FSA guarantees up to 95% of the financing, and the loans are issued by USDA-approved commercial lenders. Rates and terms are negotiated between you and your lender, subject to the FSA’s maximums.
Additional loans. The FSA also offers youth loans, Native American tribal loans and emergency loans. Rates, repayment terms and maximum funding amounts vary based on the individual program.
To qualify for one of these FSA farm loans, you’ll need to meet a variety of industry- and loan-specific requirements. You’ll need to prove your operation is an eligible farm enterprise, show your managerial experience, as well as describe your acceptable loan purpose.
As a borrower, you’ll need to show your ability to repay the loan. Although the FSA doesn’t rely on credit scores to make eligibility determinations, it’s helpful to have a good credit history. However, the FSA will not deny applications based on credit problems or a lack of credit history.
Applications for these government business loans will require extensive documentation. You have the option to apply online through the e-Gov system, by mail, in person at your local FSA office or by phone. You can expect to receive funding within 60 days after the FSA has received your application and corresponding paperwork.
2. SBA loans
Best for: Established businesses with good credit.
Like FSA farm loans, SBA loans offer long repayment terms and competitive interest rates. Plus, SBA loans have larger maximum funding amounts — up to $5 million.
Although the U.S. Small Business Administration recommends that farms and agricultural businesses look at FSA loans before applying for SBA loans, SBA 7(a) and SBA 504 loans can both be good options for established farmers with strong credit
.
SBA 7(a) loans can be used for a variety of purposes, including working capital, buying inventory and purchasing equipment. Interest rates range from 10.5% to 13%, and repayment terms are up to 10 years for working capital, inventory and equipment purchases and up to 25 years for real estate.
SBA 504 loans, on the other hand, are specifically designed for equipment and real estate purchases. Unlike 7(a) loans, which are issued by banks or credit unions, 504 loans come from three places:
A bank (50%).
A Certified Development Company, or CDC (40%).
The borrower (10%).
Typically, the borrower would provide 10% of the financing, but because farms are considered a “special purpose property” by the SBA, you’re required to provide 15% of the loan amount.
SBA loan rates on 504 loans are tied to the 10-year U.S. Treasury notes. You’ll also have to meet a job and retention requirement to qualify, which is not an element of the 7(a) loan program.
You’ll generally need multiple years in business, good credit and strong finances to qualify for either of these SBA loan options. Although — like FSA loans — SBA loans can be slow to fund, you can expedite the process by working with an SBA preferred lender. These lenders have extensive experience with SBA loan applications and are authorized to accelerate the underwriting process.
3. Farm Credit organizations
Best for: Industry expertise; personalized experience.
Farm Credit is a network of lending institutions across the U.S. that are owned by farmers, ranchers and other agricultural businesses. These institutions are divided into four districts and each district has its own regional wholesale bank.
In each of these districts, you can find organizations that offer loans exclusively for farms and other agricultural businesses. These banks offer farm equipment loans, first-time and beginning farm loans, livestock loans, poultry loans, land loans and lines of credit, among other options.
Loan amounts, repayment terms and interest rates will vary based on the specific institution and loan program — but regardless of which Farm Credit institution you work with, you’ll receive guidance and expertise that’s unique to your industry.
Representatives at these institutions can offer a personalized experience, as well as educational resources and a continuous relationship with your business. If you’re looking to work closely with your bank throughout the loan process and beyond, a local Farm Credit organization may be an option to consider.
4. Farm Plus Financial
Best for: Beginning farmer loans.
Farm Plus Financial is an asset-based lender that offers both farm loans and lines of credit. All of the lender’s available products are secured by agricultural real estate, making it a good choice for newer farmers who may not have the financials to qualify for other options.
Farm loans from Farm Plus Financial are available in amounts that range from $200,000 to $50 million. For term loans, the company can finance up to 75% of the loan-to-value (LTV). For lines of credit, on the other hand, this amount falls to 50% LTV.
Interest rates vary based on the product you choose, your repayment terms and your qualifications, among other factors. You can reach out to a lending representative to receive more information about current interest rates.
Although the value of your farm’s real estate will be one of the most important factors in your business loan application, Farm Plus Financial also requires that all borrowers have a minimum personal credit score of 660 or higher. In addition, your farm property must be five acres or greater to be eligible.
You can start an application by submitting an online inquiry form with basic information about your farm and its financing needs. Once you’ve sent the form, a farm loan specialist will reach out to discuss your options and help you with the application. In general, it can take anywhere from one to three months to get funded.
5. National Funding
Best for: Bad credit; quick access to capital.
If you need capital quickly — or you have bad credit (a personal credit score of 620 or below) — you might consider National Funding for a farm loan. National Funding is an online lender that offers two distinct options: short-term loans and equipment financing.
With National Funding’s short-term loans, you can access up to $400,000 and can use the money to cover working capital needs, inventory purchases and other day-to-day expenses. These loans are available with repayment terms up to 24 months and interest is quoted as a factor rate, which starts at 1.1 for borrowers with strong credit.
The lender’s equipment financing program, on the other hand, provides equipment loans and leases in amounts up to $150,000. You can finance or lease new and used equipment, such as combines, tractors and trucks.
These farm loans have repayment terms up to five years and factor rates that also start at 1.1 for borrowers with strong credit.
Regardless of which option you choose, National Funding offers flexible business loan requirements and a streamlined application process. To qualify, you’ll need to have been in business for at least six months, a personal credit score of 600 or higher and an annual revenue of $250,000 or more.
When you’re ready to apply, you can fill out a simple form on the lender’s website. Next, you’ll talk to a funding specialist who will help you decide which type of farm loan is right for your needs. This representative will also guide you through the application — and once you’re approved, you’ll receive funds in as little as 24 hours.
How to get a farm loan
To get a farm loan for your agriculture business, you can follow these steps:
Understand your financing needs
Think about why you need capital and what you’re going to use it for — this will help you determine which type of financing is right for your business.
You should also consider how much debt you can afford to take on. You should make sure that you’ll be able to handle any potential loan payments based on your current income.
Evaluate typical farm loan requirements
Overall, the farm loan requirements you’ll need to meet will vary based on your loan type and business lender. Most lenders, however, will consider your personal credit score, time in business and annual revenue.
Additionally, as an agriculture business, lenders will likely pay close attention to industry-specific criteria, such as your farm management experience, the amount of land you have, your farm business plan and assets.
Research and compare lenders
With a better understanding of your needs and qualifications, you should be able to focus your lender search to find the options that will be best suited to your business. In general, if you think you may qualify for an FSA loan, you might consider starting your search with these low-interest options.
As you explore different lenders, you should compare them based on factors such as:
Loan types.
Maximum funding amounts.
Repayment terms.
Down payment requirements.
Funding speed.
Application process.
Customer service.
Industry experience.
Lender reputation.
Gather your documentation and apply
Once you’ve found the right lender for your needs, you can gather all of the documentation you need to submit your application. In many cases, you’ll be able to work with a lending representative who will be able to help you through the process and answer any questions you may have.
Once you’ve submitted your application, approval and funding times will vary. Government and commercial lenders tend to have longer timelines, ranging anywhere from several weeks to several months. Online lenders, on the other hand, can fund applications much faster — with some companies providing capital in just 24 hours.
Frequently asked questions
Can I get a farm loan with bad credit?
Yes. Although there may be fewer farm loan options available to borrowers with bad credit, it is still possible to get financing. The FSA, for example, does not exclude its loan applicants for poor or non-existent credit histories. Online lenders are also more likely to accept borrowers with bad credit.
Can you get a loan to buy a farm?
Yes. In fact, the FSA offers a direct farm ownership loan specifically designed to help borrowers buy a farm or ranch. Commercial and online lenders may also issue business loans that can be used to buy a farm.
How can you get a farm loan with no down payment?
If you want a farm loan with no down payment, you can start by looking into FSA loans. Some of the FSA direct farm loans do not require a down payment.
You might also consider online lenders, such as National Funding, many of which don’t require down payments for their loan options. However, to get a loan with no down payment, it will be helpful to have strong qualifications.
And it’s essential to keep in mind that lenders may charge higher interest rates on no-down payment loans than they would if you provided a down payment on your financing.
Non-QM lender Carrington Mortgage Services (CMS) has rolled out a new 40-year loan and temporary buydown programs, expanding its suite of non-agency and government mortgage products. According to its release, the 40-year mortgage option is available for all non-QM products (including Carrington Flexible Advantage, Carrington Flexible Advantage Plus, Carrington Prime Advantage, and Carrington Investor Advantage). … [Read more…]
Like many of you, we are seeing a significant increase in commercial real estate (“CRE”) loan workouts. The magnitude of the swell in distressed CRE loans remains unclear, although one thing is certain: appreciating the options and remedies for CRE participants, particularly lenders and borrowers, has never been more critical.
A Changing Landscape
Under contemporary commercial real estate finance practices, many CRE loans are typically structured as nonrecourse interest-only loans with balloon payments at maturity. In times of low interest rates and booming property values – the case over the last decade or so – borrowers were generally able to refinance their loans with relative ease.
Unfortunately for borrowers, times have changed dramatically, and the current real estate lending environment has thrown the traditional playbook out the window. In response to persistently high inflation, the Federal Reserve has raised interest rates by 500 basis points since March 2022 (with additional hikes expected this year). Rate hikes, combined with declines or threatened declines in real property values, have resulted in a challenging environment for CRE refinancings.
Borrowers eager to refinance will face higher borrowing costs, and banks, skeptical that property values will recover soon, have grown reluctant to issue new loans. Additionally, many properties (particularly in the office sector) cannot support the carrying costs associated with higher-interest alternative credit providers.
What Lies Ahead
A spike in real estate foreclosures, deeds-in-lieu, and CRE loan modifications is therefore looming (if not already here). Until values stabilize, CRE may become a “hot potato,” with borrowers whose equity values have evaporated uninterested in expending additional resources to retain their properties and lenders reluctant to take them over.
If history is any indication of what’s ahead, we expect the increased activity in loan workouts to result in a mix of mortgage and mezzanine foreclosures, bankruptcy filings, deeds-in-lieu, loan modifications, loan sales, and property short sales.
CRE Loan Workout Outcomes
From “amend and extend” strategies to deeds-in-lieu. there are many potential paths that a loan workout may take. There are tax implications to each outcome that will have to be considered and may drive many of the decisions in a loan workout. Those include cancellation of debt income for recourse loans, capital gains treatment for nonrecourse loans, and a material loan modification being treated for tax purposes as an exchange of debt.
Amend and Extend: In most cases, we expect to see agreements between borrowers and lenders to modify CRE loans permitting the borrower to continue to own and operate property under more favorable loan terms. This “amend and extend” strategy became popular after the 2008 financial crisis when experts expected property values to recover quickly, which ultimately came to pass. It remains to be seen whether lenders will show the same flexibility in the current climate.
Loan modification agreements come in many different flavors. They may simply extend maturity dates on the same terms and conditions. By extending out loan maturity dates to 2025 or later, lenders and borrowers are betting that the additional term will allow sufficient time for interest rates to fall, occupancy rates to rise, and property values to recover enough to allow for a more successful sale or refinancing. Loan modifications can also be used to adjust interest rates, loan covenants, the cash management waterfall, defer capital expenditure requirements, provide additional liquidity, allow for the entry of a new equity partner, and otherwise waive existing defaults. In many cases, to obtain these concessions form the lender, a borrower or its sponsor may be required, in addition to fees, to reduce principal or invest new equity for capital improvements or as a carried interest reserve.
Foreclosures: CRE loans are underwritten based on the value of the underlying collateral. A real property loan is collateralized by a mortgage on the property itself, whereas a mezzanine loan (and sometimes preferred equity) is collateralized by a pledge of the sponsor’s equity in the entity that owns the property. After a loan default, the lender has several enforcement options, including foreclosure. Generally, a successful foreclosure extinguishes all junior liens and encumbrances and removes them from the property’s title.
The foreclosure process differs from state to state and by the type of collateral. Foreclosures of mortgages, leasehold mortgages, or deeds of trust on real property can be judicial or non-judicial. That threshold question will typically determine the duration of the process. A judicial foreclosure takes months or years, depending on the defenses raised by the borrower. A non-judicial foreclosure can be completed in a matter of weeks. Although more common in judicial states, most mortgage loans contain provisions that entitle the lender to the appointment of a receiver early in the case to take control of the property. This remedy may also be available in non-judicial states where the lender commences an action in state court for the appointment of a receiver. A judicial foreclosure provides a borrower that wants to delay or contest the lender’s enforcement of its remedies with a forum to raise defenses and create triable issues of fact. In non-judicial states, the burden is on the borrower to commence an action in court to enjoin or stop the foreclosure. That presents a higher bar to overcome.
In contrast, a foreclosure on a pledge of the membership or partnership interest in the mortgage borrower, either under a mezzanine loan or as additional collateral securing a mortgage loan, is always a non-judicial process. Equity interests in commercial entities are personal property. Thus, a pledge of an equity interest is governed by the Uniform Commercial Code, which expressly contemplates non-judicial foreclosures provided that they are conducted in a commercially reasonable manner.
Unlike the mortgage lender, which can foreclose on the borrower’s fee interest, a mezzanine lender forecloses on the equity interest in the fee owning entity. This means that the mezzanine lender is taking ownership and control of an entity and all of its debts and liabilities, including the mortgage loan. This prospect of having to assume the mortgage loan and provide a replacement guaranty, if any, may deter some mezzanine lenders from foreclosing on their loans.
Bankruptcy: Many CRE loans have been structured as non-recourse, meaning that the lender’s recourse is limited to the property itself. To discourage borrowers (who may have invested relatively limited equity in the property) from filing for bankruptcy protection in an effort to halt foreclosure proceedings and then to try to cramdown their lenders, commercial real estate loans often require a credit-worthy guarantor to provide a springing recourse guaranty (known as a non-recourse carve-out guaranty). Personal liability under the guaranty for the entire loan balance springs into existence – becoming a recourse loan – upon the happening of specified “bad” events, such as a bankruptcy filing by borrower.
The advent of the springing recourse guaranty puts the guarantor in the position of having to repay the entirety of the loan in full if the borrower files for bankruptcy (or triggers certain other defaults). As a result, borrowers generally avoid filing bankruptcy except where: (1) the property’s value exceeds the amount of the guaranty and whatever other obligations may need to be paid in bankruptcy; and (2) the guarantor is insolvent or is itself prepared to file for bankruptcy protection as well, such that the liability exposure under a springing guaranty is less of a threat.
Deeds-In-Lieu: For a variety of reasons, borrowers may prefer to give the property to the lender via a deed-in-lieu, rather than delay the inevitable by forcing the lender to conduct a foreclosure. For borrowers and guarantors, a deed-in-lieu of foreclosure may include a release that will extinguish or reduce liability under any existing guaranties and loan documents (although such releases will typically exclude environmental indemnities). For lenders, a deed-in-lieu should expedite the transfer of the property and allow for a more seamless transition.
A similar method to consensually transfer ownership and control exists under Article 9 of the Uniform Commercial Code. This is known as a “strict foreclosure” and allows for the sponsor to transfer its equity interest in the fee owner to the mezzanine lender.
One complexity here is that the borrower cannot force its lender to take the property. While it may seem counterintuitive, once the default actually occurs the lender may be unwilling to take ownership of the property due to the expenses associated with it, required capital expenditure projects, and cost and time to manage it. The property may also have potential successor liability issues, such as environmental issues, that often deter lenders from accepting title. If the lender has control of the rents through a lockbox and cash management arrangements, a borrower will not be able to cutoff the flow of funds without triggering recourse liability under a springing guaranty. Thus, the lender can continue to receive the cash flow without having to assume the risks of actual fee title ownership. On the other hand, if cash flow is not sufficient to cover the operating, repair and maintenance costs of the property, a lender may have to move quickly to assume ownership and control to preserve the value of its collateral. In that case, a deed-in-lieu of foreclosure may be a desired approach.
A deed-in-lieu may present other issues if a mezzanine loan or loans also exist. In certain cases, depending on the terms of the mezzanine loan documents and any intercreditor agreement between the mortgage lender and mezzanine lender, the consent of the mezzanine lender may be required before a borrower could convey the property to the mortgage lender. That requirement will give the mezzanine lender an opportunity to extract its own concessions in return for its consent.
Other Possible Variations
While beyond the scope of this introductory article, there are numerous other potential paths that a loan workout may travel. For example, the lender may decide to sell its loan to an opportunistic buyer that is willing to exercise remedies to acquire the property.
The borrower and lender may also agree to convert all or a portion of the lender’s loan into equity of the borrower (or a new joint venture), while bringing in another investor to inject needed funds into the project.
The possibilities are numerous, and creative thinking (and counsel) are a must.
2023 Goulston & Storrs PC. National Law Review, Volume XIII, Number 201
For many individuals and families, owning a home is a lifelong dream. However, with rising real estate prices, some may find themselves seeking financing beyond the conforming loan limit. This is where jumbo loans come into play.
What is a jumbo loan?
What exactly is a jumbo loan in New Mexico? A jumbo loan is a specialized type of mortgage that comes into play when you’re seeking financing for a home that surpasses the conforming loan limits (CLL) established by the Federal Housing Finance Agency (FHFA). Typically, this type of loan is necessary for upscale, luxurious properties or those situated in pricey housing markets like Santa Fe.
If the home you’re purchasing will require you to borrow more than the CLL, you’ll need to apply for a jumbo loan. Because of the larger loan amounts, jumbo loans typically carry stricter requirements and higher interest rates than conforming loans. Lenders may require a higher down payment, a lower debt-to-income ratio, and a stronger credit score to qualify for a jumbo loan in New Mexico.
What is the jumbo loan limit in New Mexico?
In New Mexico, the conforming loan limit is $726,200 across all counties. So, for example, if you’re buying a home in Santa Fe County , where the median sale price is $622,000, a loan limit exceeding $726,200 would be considered a jumbo loan.
As a reminder, the amount being borrowed is what determines whether or not you’ll need a jumbo loan, not the home price. So, if you were to put $50,000 down on a $750,000 home in Albuquerque, the mortgage would be $700,000, which is under the conforming loan limit for this area. In this case, your loan wouldn’t be considered a jumbo loan.
For more information on the conforming loan limit in your county, use the FHFA map.
What are the requirements for a jumbo loan in New Mexico?
Borrowers must meet stricter requirements to qualify for a jumbo loan than they would for a conforming loan. The specific requirements can vary from lender to lender, but below are the typical requirements for borrowers seeking a jumbo loan in New Mexico.
Higher credit score: In order to have your loan application approved for a jumbo loan, most lenders will require a credit score of 720 or higher. While some lenders may be more lenient and accept a score as low as 660, a score below this is generally not accepted. In contrast, a credit score as low as 620 could suffice for a conforming loan with some lenders.
Larger down payment: Obtaining a jumbo loan in New Mexico typically requires a larger down payment compared to a conventional loan. Lenders may require a down payment of 10% to 20% or more, depending on the specific loan program and the borrower’s financial situation. If you’re approved with a down payment less than 20%, keep in mind you’ll most likely be required to purchase private mortgage insurance (PMI).
More assets: During the asset review process, lenders typically request that jumbo loan borrowers provide evidence of sufficient liquid assets or savings to cover the equivalent of one year’s worth of loan payments.
Lower debt-to-income ratio (DTI): Lenders typically require a debt-to-income ratio (DTI) of under 43% for jumbo loan borrowers, although a DTI closer to 36% is preferred. This ratio is calculated by dividing the sum of all monthly debt payments by the borrower’s gross monthly income. A lower DTI indicates a stronger ability to repay the loan and can help borrowers secure more favorable terms and rates. It’s important for New Mexico borrowers seeking a jumbo mortgage to have a clear understanding of their DTI and take steps to improve it if necessary.
Additional home appraisals: When you buy a home in New Mexico, your lender will require a home appraisal to confirm that the property’s value is equal to or higher than the loan amount. In some cases, a lender may require an additional appraisal for a jumbo loan. In housing markets with very few comparable property sales, the cost of the appraisal may be higher than in cities with more frequent sales.
Yes, we’ve all heard it. Buying a home today might seem like the most unaffordable, and therefore impossible, it’s ever been. Home prices are near record levels, pushed up by bidding wars erupting on anything well-situated and move-in ready. Plus, mortgage rates are nearing 7%.
But here’s the thing: The baby boomers had it worse.
In May of this year, the typical buyer spent just under a third of their household income, about 32.8%, on housing. As uncomfortable as that might be, it’s not even close to how much buyers plunked down in the early 1980s.
In 1981, the same year the AIDS virus was identified, the Iran hostage crisis came to an end, and “Raiders of the Lost Ark” topped the box office charts, homebuyers that September and October spent 51.3% of their household income on their mortgage payments.
Let that sink in for a moment.
Furthermore, that percentage doesn’t even include what they paid for utilities, property taxes, insurance costs, and homeowners association fees.
Buying a home is “not as unaffordable as it’s ever been,” says Realtor.com® Chief Economist Danielle Hale. But, “in the grand scheme of things, housing is pretty unaffordable right now.”
To figure out how affordable buying a home has been over the past 50 years, the Realtor.com data team analyzed data going back to 1973. We looked at monthly existing single-family home prices from the National Association of Realtors®, weekly mortgage interest rates for 30-year fixed loans from Freddie Mac, and median annual household income from the U.S. Census Bureau. Then we calculated the typical mortgage payment of a buyer taking out a loan on the median-priced home and what percentage of their household income that would eat up.
The analysis doesn’t factor in regional price differences, new construction, or the percentage of income that individual buyers spent on homes.
“If you go back in history, you can find a period where housing is more unaffordable than it is now,” says Hale. “But you have to go back almost 40 years.”
Why today’s buyers wouldn’t want to purchase a home in 1981
In the fall of 1981, homes were cheap by today’s standards.
The typical single-family home cost just $66,125—about six times less than the cost this past May, according to the most recent data from NAR.
However, the typical household was bringing in only about $19,074 in 1981, according to U.S. Census Bureau data. And mortgage rates topped 18% that fall. (And you thought 7% was rough.)
Those turbo-sized rates meant that 99.5% of a buyer’s first year of mortgage payments was going toward just the towering amount of interest on the loan. The buyer didn’t pay down 10% on the principal of the balance until the 18th year of the loan, assuming the buyer didn’t refinance—which most buyers did. (This calculation includes a 20% down payment.)
Today’s average family is earning about $73,505 a year. But in May, they were contending with median existing-home prices of $410,100 and mortgage rates hovering in the mid-6% range and which have since risen to the high 6% territory. About 85% of their first year’s mortgage payments is going to interest.
One important difference is that instead of waiting nearly two decades to have 10% of their principal paid off, they achieve that milestone by year seven.
“Mortgage rates play a really substantial role in how affordable housing is at any time, especially since so many buyers buy with a mortgage,” says Hale.
Uncomfortable similarities between 1981 and 2023
There are a few similarities between then and now. Inflation was soaring in the early ’80s, causing the U.S. Federal Reserve to hike interest rates. (Sound familiar?) The nation was also in a full-blown recession in 1981. Fast-forward 42 years, and the nation appears to be flirting with another downturn.
The number of home sales slowed in the early 1980s as well as in this post-pandemic housing market as fewer folks can afford to buy due to higher mortgage rates.
Then, as now, most of those purchasing homes earn more than the median income—unless they had very generous family members, stock options, or trust funds. Or they’re existing homeowners who can put the equity they built in their last home into their new one.
“Boomers have been saying things were harder when we were young for a long time. And in some respects, they are right,” says Hale. “But in other respects, they don’t have the same amount of student loan debt and child care costs that young people have today.”
Plus, once mortgage rates fell, most folks who purchased homes in the early 1980s had refinanced their loans to lock in the new rates and “drastically” lower their monthly mortgage payments. By 1986, rates had fallen back down to the single digits.
Recessions and pandemics may be good times to buy homes
As counterintuitive as this may seem, recessions may be financially advantageous for buyers to purchase homes—if they remain employed and have the funds to do so. That’s because interest rates usually (but not always, as the early 1980s demonstrated) fall during economic downturns. That makes homebuying more affordable.
Over the past 50 years, homes were the most affordable as the country climbed out of the Great Recession. In early 2012 and 2013, buyers were spending about 14%—or less—of their income on a home. That’s because mortgage rates were below 4%.
The same thing happened in the early days of the pandemic. The economy ground to a halt as stay-at-home orders proliferated and mass layoffs ensued. To stimulate the economy, the Fed cut interest rates and mortgage rates fell below 3%—for the first time ever.
Those low rates triggered the big run-up in prices and offset those gains. Since buyers were spending less on interest, they could afford to purchase more house. The result? In spring 2020, buyers were spending just under 18% of their income on housing.
“Affordability is one of the factors that kicked off the buying frenzy that we saw in the early part of the pandemic,” says Hale.
It wasn’t until mortgage rates climbed above 4% in March 2022 that buyers began to get priced out. That month they spent just under 25% of their income on housing. As rates ticked up and affordability worsened, more buyers left the market and fewer homes went up for sale (as sellers didn’t want to give up their low rates).
The situation has only gotten worse, with buyers spending nearly a third of their income on housing in May.
“When housing is unaffordable, it’s very tempting to stretch your budget,” says Hale. But with inflation, rising property taxes, and high energy bills, “now’s probably not a good time to do that.”
Global real estate investment network iintoo has now acquired the assets of RealtyShares as part of a joint venture. The move increases iintoo’s portfolio from $1 billion to $2.5 billion in assets under management. The purchase catapults iintoo into a market leadership position, which will benefit investors via the company’s disruptive approach to crowd-sourcing real estate investments.
With average annual yields of 16.63%* on average, iintoo has proven its disruptive approach effective. The network of iintoo will reach a community of 200,000 registered investors, offering them the opportunity to access premium, highly vetted deals under the company’s expert management. Eran Roth, CEO of iintoo had this to say about the acquisition:
“This event is a watershed moment for iintoo, the industry and investors. The real estate business has historically been an exclusive club, lagging in technological innovation and accessibility for retail investors, but in the last five years, we have seen significant disruption led by forward-thinking startups. Our platform and approach have allowed individual investors to gain access to premium real estate investment opportunities while providing the industry’s first equity protection program.”
RealtyShares was the second largest online real estate investment platform in the United States before the company stopped taking deals in 2018. At that point, RealtyShares had $400 million in equity from its investors. So, order to oversee RealtyShares’ assets, iintoo has formed a joint venture with RREAF Holdings, LLC to take over management activities for the active investment portfolio.
The former and current investors in RealtyShares will now get access to iintoo’s platform and investment opportunities. Shoshana Winter, iintoo’s Managing Director in the U.S, offered this via the company’s press release:
“The iintoo model has transformed the way people think about and invest their money. Our vision is to take the success we have seen to date and continue to offer new and alternative asset classes to our expanded base of investors. We are confident that our innovative investment platform, our equity protection product** and our data-driven, curated approach to delivering premium investment opportunities will make us a leading brand that investors can depend on as they seek new ways to diversify their portfolios.”
Crowd-sourced funding opens new avenues for financing real estate for property owners and developers as well. The iintoo investment portfolio includes income-generating multifamily properties, commercial real estate, retail, and mixed-use properties, with a focus on projects in developing cities, as they have proven to perform well despite economic downturns. Acquiring RealtyShares pushes iintoo into a leading position in this market category, enabling the company to accelerate its global presence in the years ahead.
* The exit annual yield is equal to the ratio between the total profits from the equity investment (before tax) and the total raise (amount invested by iintoo’s equity investors in the project) divided by the investment term.
Phil Butler is a former engineer, contractor, and telecommunications professional who is editor of several influential online media outlets including part owner of Pamil Visions with wife Mihaela. Phil began his digital ramblings via several of the world’s most noted tech blogs, at the advent of blogging as a form of journalistic license. Phil is currently top interviewer, and journalist at Realty Biz News.
Every American Airlines plane flies for hundreds of hours, carrying thousands of passengers for miles across the globe. But after a while, even the most reliable aircraft needs a break. For some of them, that break comes at a sprawling 3.3 million-square-foot facility in Tulsa, Oklahoma.
Functioning as its own ecosystem within Tulsa, this facility’s various hangars and warehouses are where the airline’s planes are picked apart. Seats and engines are refurbished. Exteriors are repainted to sport red, white and blue stripes along the tail fins.
These are only some of the many tasks that occur in this spacious, maze-like facility. Hangars upon hangars stretch across the massive property by a National Guard base and an Amazon warehouse.
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“It’s like a city within a city,” Barbara Cruz, a store supervisor at American’s Tulsa facility, said.
Thousands of American planes have gone through Tulsa since 1946, when the Fort Worth-based carrier relocated its maintenance base from LaGuardia Airport (LGA) to the old oil capital following World War II.
The base — a major hub for American’s maintenance operations — now has about 4,800 employees and claims to be one of the largest commercial aviation bases in the world.
At any given time, the facility can hold up to 20 narrow-body aircraft in its hangars; 800 commercial planes pass through it annually.
In 2020, American unveiled plans to invest $550 million in the Tulsa base to construct a new wide-body hangar and make improvements to each building in the facility. The new hangar should’ve begun taking shape in early 2021, but its construction start date was pushed back due to the coronavirus pandemic. It will be able to hold two wide-body (or about six narrow-body) aircraft at a time.
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Despite the renovation delays, the Tulsa base serves as an important destination for many American aircraft. It handles every bit of maintenance for a plane, from cleaning out toilets to inspecting engines.
Boeing 737s and 777s are the jets that primarily make their rounds in Tulsa. The aircraft either go through heavy, routine or unscheduled maintenance in a process that’s similar to surgery.
“We document all the findings,” Ed Sangricco, the managing director at the Tulsa base, said. “We go in, and we fix all those findings. We close the airplane, we put it back together again, and then we check everything — we make sure everything works.”
While the pandemic halted travel and grounded planes worldwide, that didn’t stop the maintenance technicians, engineers, managers and supervisors in Tulsa. American’s aircraft technicians were tasked with maintaining roughly 100 aircraft already at the base to prevent corrosion (and to stop weeds and birds from infesting the crevices of the planes). That meant remote work wasn’t an option for the employees at the Tulsa base.
Airlines received billions of dollars from the federal government during the pandemic partly to keep their fleets in tip-top shape, so they would be ready when travel demand returned.
“Maintenance requirements don’t stop during COVID-19,” Sangricco said.
Related: 6 incredible facts about the Boeing 777
What it takes to maintain a plane
Maintaining a commercial plane is a complicated process. Hearing all the steps to ensure an aircraft is running smoothly — all over the course of an eight-hour tour — was similar to taking a college crash course in physics and engineering.
Aircraft maintenance is heavily governed by the Federal Aviation Administration, which has a set list of requirements and deadlines for every plane component. Every record chronicling the maintenance of an aircraft needs to be preserved to be in compliance with the FAA, according to Roger Steele, a supervisor at the Tulsa facility who specializes in 737 narrow-body maintenance.
So, document holders containing slips of paper that detail every task from the FAA line two walls of an office within a 737 hangar at the Tulsa base.
At the start of a visit, a 737 narrow-body will undergo about 1,200 required tasks — excluding non-routine inspections — before it can fly again.
The Tulsa facility is never quiet. Throughout my tour of the maintenance site, I could hear constant drilling noises and the occasional thunderous engines of a National Guard plane taking off a couple of miles away as Steele explained the ins and outs of narrow-body maintenance.
The 737 I saw in the hangar had already been stripped down, as it was in its fifth day of maintenance. (The crew at American has around 25 days to completely finish work on the plane.)
The seats, the walls and the flooring were completely gutted from the aircraft. All that was left inside were gray insulation bags on all sides, which made the 737 look more like a cave than a plane.
Inside, technicians were already hard at work. One was by the plane’s back door, critically documenting what parts had been affected by corrosion.
While several areas can suffer from corrosion, a plane’s galleys and lavatories are the most susceptible to corrosion and environmental damage, as moisture from toilets and soft drinks wear down the interior.
“What coffee and soda pop can do to an aircraft after humans consume it is very corrosive,” Steele joked.
Once the technician documented the damage, the next step was determining what parts needed reinforcement. One piece of metal in the galley suffered from corrosion, so the technician sanded the area and recorded its remaining structural thickness.
Like the maintenance process itself, refurbishing an aircraft is anything but glamorous. At the Tulsa base, the majority of hangars and buildings have no air conditioning, leaving most of the workers stuck toying away at engines and aircraft in the sweltering summer heat.
When I toured the site, it was already a muggy 90 degrees, but Tulsa summers can soar well into the 100s during the season’s peak.
For some, the day starts early. Robert Bales, a maintenance technician who works on wide-body half galleys, normally wakes up at 5 a.m. for his 6:30 a.m. shift.
Each technician works around 8 1/2 hours. Much of the schedule, specifically for cabin work, is determined by the crew chief and the needs of the aircraft.
Before someone can start working at the facility as a technician, they must undergo significant training.
Gabriel Figueroa Navedo, another wide-body aircraft technician, said he went to trade school to receive an FAA-issued aircraft technician license. There, Navedo — who first started his career managing reservations and bookings for American — learned extensively about topics like hydraulics and electricity.
However, Navedo said many of those skills do not directly apply to his day-to-day job. Instead, the training provided a general knowledge of planes.
“I like to call it a license to learn,” Navedo said, “because it’s got to cover stuff like small propeller engines, and the FAA doesn’t know if you’re gonna work here, or if you’re gonna be working on your own private plane.”
Related: What it’s really like at flight attendant training
Even the seats and toilets need a makeover
When an aircraft’s seats need refreshing, the plane goes to a different warehouse, where the seats get disassembled. During this process, technicians tend to find all sorts of trash underneath, including gum, candy, pills, credit cards, cellphones and iPads.
“You’re gonna find no telling what,” Brent Strickland, a supervisor who primarily works on Boeing 777s and 787s, said.
Strickland said he has even found false teeth and engagement rings inside the seats.
After removing the various items passengers leave behind, the seats are washed and left to dry. Then, the technicians check the hardware for any damage.
Cushions are changed about every six years, according to Strickland, and it only takes two to three days to completely finish a seat.
It’s not just the seats that need refurbishing during maintenance — the toilets also get picked apart. The waste tanks are cleaned out, and the flushes are inspected by another team of technicians dedicated to toilet maintenance. Strickland described those team members as “another one of those unsung heroes.”
Dee West, a technician, cleaned out a water valve during my tour, closely inspecting the valve under the scope of a flashlight before carefully reassembling the three parts and a spring in the pipe.
“It ain’t no joke,” he said. “It’s gotta be done right.”
One mistake by a toilet technician could be costly for the airline, as each toilet costs $17,000.
Perhaps surprisingly, this area of focus is one of the more desirable on the Tulsa base, according to an American spokesperson. That’s because it’s one of the few jobs workers can do inside an air-conditioned building — providing a reprieve from the otherwise hot and muggy weather Tulsa experiences every summer.
Engines, windows and other plane parts also get a makeover, depending on the aircraft’s maintenance schedule. This includes the fans and combustive parts of the engine, which the staff works on separately in “cold” and “hot” rooms within another hangar, respectively.
Blue lines on the walls demarcate the “cold” parts of the room, whereas painted yellow lines indicate the “hot” area.
Staff members also inspect some parts of the engine by soaking them in a fluorescent lime-green liquid to magnify which parts need to be reinforced.
Whenever parts like the wings and the radome — located at the tip of the plane — need a lift, they are sent to a composite center. There, they get reinforced with materials such as carbon fiber and a honeycomb web made from materials like aluminum.
“[It’s] poetry in motion,” Jody King, a composite repair center crew chief at American’s composite repair center, said when referring to the process of fitting the materials onto parts of the aircraft.
The reason this complex web of maintenance is even possible is because American’s site also has a warehouse containing thousands of parts and stickers. These parts are either shipped to other hangars in Tulsa or to airports and third-party services that need to do maintenance on an aircraft.
Related: Take a look inside Air New Zealand’s unique cabin innovation laboratory
Gearing up to fly again
Before a plane is ready to fly again, the landing gear — the wheels on the plane, in layman’s terms — must be checked, and the exterior must be repainted and rewaxed.
You may not notice the gargantuan size of planes since you typically only see them from afar in the sky or through the windows of an airport. However, were you to see one up close, you’d be struck by the size.
The landing gear alone measures at least 21 feet tall, roughly the equivalent of four people my height (I’m around 5 feet, 4 inches) standing on top of one another.
The wings also feel so vast it almost seems impossible that workers can repaint them by hand in a matter of days; the team uses foam rollers and brushes, according to Jeff Green, a shared services supervisor.
Once the plane completes its maintenance maze in Tulsa, it’s ready to return to the skies and fly to hundreds of destinations. Later, it’ll likely touch down in Tulsa yet again to go through the same routine.
If you haven’t heard of PNC Mortgage before, you probably will in the near future.
They’re a rapidly growing depository bank and mortgage lender with 2,600 branches across 19 states nationwide.
PNC is also one of the top 10 largest banks in the United States based on total assets. However, most of their retail operations tend to be in the Midwest and Northeast regions of the country.
But you can still apply for a home loan with the company from just about anywhere in the United States because they let you apply online, by phone, or in person at a branch.
Let’s learn more about PNC to see if they should be included in your home loan search.
Who Is PNC Bank?
A depository bank and mortgage lender with roots in Pittsburgh
The name is based on two former predecessors (Pittsburgh National Corporation and Provident National Corporation)
They acquired National City Mortgage during the housing crisis in 2008 to become a major mortgage player
A top-25 mortgage lender nationally that funded about $36 billion in home loans during 2021
The history of PNC Bank can be traced all the way back to the mid-1800s, though it’s unclear when they first began offering mortgages on residential properties.
But one thing is certain – they’ve been around a while and look to be growing larger as time goes on, especially in the home lending space.
One major catalyst in their growth story had to do with their timely acquisition of National City Mortgage, which was a major home loan lender until the housing crisis hit in the early 2000s.
PNC Mortgage basically reinvented itself with the merger thanks to National City’s large mortgage presence. They were a top-10 mortgage lender up until the crisis.
However, PNC has yet to crack the top-10 lender list themselves, though it’s probably a matter of time if they continue on the same course.
What Does PNC Mortgage Offer?
They offer both fixed and adjustable-rate loan options
Conforming and jumbo loans
FHA loans and VA loans
And home equity loans and lines of credit
PNC Mortgage offers a variety of home loan programs, including typical fixed-rate options like the popular 30-year fixed and 15-year fixed.
Additionally, you can get your hands on three different types of ARMs, including a 5/1 ARM, 7/1 ARM, and a 10/1 ARM.
If you happen to live in a more expensive region of the country, or have plans to buy a mega-mansion, know that they accept jumbo loan amounts up to $5 million. This should satisfy most borrowers out there.
Conventional loan options aside, they offer government home loans as well, including FHA loans and VA loans.
Both government loan options come in 30-year fixed and 5/1 ARM varieties.
PNC also offers three different types of home equity options, including a HELOC, a home equity loan, and a so-called “Home Equity Rapid Refinance.”
All three include a 0.25% interest rate discount when you set up and maintain automatic monthly payments via a linked PNC checking account.
The Home Equity Rapid Refinance is referred to as a “lower cost solution than a traditional fixed rate mortgage,” though they also say you can enjoy fixed payments for up to 30 years.
It’s somewhat unclear what it actually is, though it sounds kind of like a cash out refinance with limited closing costs. One twist is it seems to be a home equity loan that is in the first position (not subordinate), an important detail if you were to get foreclosed upon.
Anyway, a home appraisal fee isn’t required in many cases, and they allow LTVs as high as 84.9% with no private mortgage insurance. It sounds like a weird take on a home equity loan.
PNC Mortgage Rates Seem Competitive
PNC Mortgage openly advertises its mortgage rates
Which not all home loan lenders tend to do
They appear to be quite competitive relative to other lenders
But note that they often assume a 70-80% LTV ratio among other things
Speaking of interest rates, let’s talk about the rates at PNC Mortgage. First off, kudos to them for advertising their mortgage rates. Not all mortgage companies do.
My first impression – they’re quite competitive, but as always, we have to consider the assumptions they make. And they make some pretty big ones.
For conforming loan amounts, they assume you’re putting down 20% of the home purchase price, or that you have 20% equity in your home. Plenty of homeowners put down less when buying and/or have less equity.
They also expect you to have excellent credit, defined as a 740-credit score, and presume the property is a one-unit single-family home.
When it comes to jumbo loans, they make the same assumptions but base pricing on a 30% down payment, or 70% LTV.
While this isn’t uncommon (most lenders do this), you do have to pay attention to the assumptions to ensure you aren’t disappointed when you receive your actual rate quote.
Also take note of the lock period, which might be 30 or 60 days. If you accept a lower lock period you might be able to obtain an even lower mortgage rate.
PNC Mortgage Reviews
If their mortgage rates and closing costs are competitive by all means consider them
They also recently launched a digital home loan process powered by Blend
And they offer a free biweekly payment service and relationship discounts
But their reviews are a bit mixed so be sure to do your research
It’s hard to get super excited about going to a big, old bank to get a home loan.
But PNC Mortgage recently launched a revamped digital mortgage process backed by fintech company Blend in September 2022.
They also offer relationship discounts on their mortgage rates and home equity offerings, along with a free biweekly mortgage payment service.
However, they’re a little late to the party seeing that other major players, such as Rocket Mortgage from Quicken, and the digital offerings provided by the likes of Bank of America and Chase, have been around for years.
Maybe PNC can offer lower mortgage rates than the competition, which is certainly enough to choose them over another lender, but there doesn’t seem to be much else to talk about here.
They have their “Home Insight Planner,” which features some mortgage calculators and lets you generate home affordability scenarios, but it seems a bit clunky and not all that revolutionary.
They do service a lot of mortgages, so it’s possible you might actually be making your mortgage payments out to PNC if you get your home loan with them. This can be a plus if you’re sick of your mortgage loan being sold and transferred over and over.
But until PNC Mortgage does more to separate themselves from the crowd, they likely won’t attract many clients outside their existing customer base, especially as more disruptors emerge to shake up the scene.
Lastly, while they do have an ‘A+’ rating from the Better Business Bureau (BBB), many of their reviews are pretty low.
For example, they’ve got a 1.12/5 rating on the BBB website from reviews, a 1.3/5 on Trustpilot, and a 3.7/5 on WalletHub.
The one bright spot is Zillow, where they enjoy a 4.95/5, with most reviews likely more aligned with their home loan business than overall banking services.
If that’s the case, PNC could be a good choice among other mortgage companies out there.
PNC Mortgage Pros and Cons
The Good Stuff
Offer a digital mortgage process powered by Blend
Can apply for a home loan online, in-person, or by phone
Openly advertise their mortgage rates online
Relationship discounts for existing customers
Lots of loan programs to choose from including jumbos and home equity loans/lines
Licensed to do business nationwide
They service their own loans
A+ BBB rating
The Maybe Not
As a big bank they might be overly bureaucratic/slow
New York Governor David A. Paterson is looking to keep more distressed borrowers in their homes by expanding previous laws and establishing safeguards against foreclosure scams.
New legislation would require banks and mortgage lenders to give all homeowners a 90-day pre-foreclosure notice so they have more time to work on viable alternatives; this was previously in place only for subprime loans.
Lenders would also be required to make a regulatory filing with the Banking Department within three days of the pre-foreclosure notice, providing specified borrower information so the Division of Housing and Community Renewal could provide targeted assistance to those most in need.
Tenants living in foreclosed properties would be given written notice of change of ownership and the opportunity to remain in the homes until the lease expires, or for an additional 90 days, whichever is longer.
Plaintiffs who obtain a judgment of foreclosure would be required to maintain the foreclosed property, and brokers who perform distressed property consulting services would be barred from accepting upfront fees.
Additionally, $25 million would be set aside to fund counseling and legal services to homeowners facing default or foreclosure.
“This legislation will provide added protections for homeowners who are behind on their mortgages and crack down on scams that prey on vulnerable homeowners,” said President and Chief Executive Officer of “NYHomes” Priscilla Almodovar, in the release.
“It will also offer greater opportunity to offer counseling to homeowners to help them stay in their homes. These proposals are consistent with our efforts to promote sustainable homeownership in New York State.”
Unfortunately, we’ve seen similar legislation in California do little more than delay an inevitable problem.