How to Get a Mortgage in Seattle
Are you wondering how to get a mortgage in today’s real estate market?
Agent Joe is joined by Carese Busby, Mortgage Loan Consultant from CaliberHome Loans to discuss the mortgage process in Seattle. If you've been wondering how to get a mortgage, or were unclear about the mortgage lending process, you'll find Carese's insights very helpful!
In this video, you’ll learn:
How to choose a mortgage lender (including Carese’s perspective on her #1 job)
What the mortgage process looks like, from pre-approval to closing
What Carese does to protect her buyers from fluctuating interest rates
Meet Joe Patterson, Real Estate Broker from Realogics Sotheby's International Realty
Meet Carese Busby, Mortgage Loan Consultant (NMLS ID: 619429) from Caliber Home Loans at www.caresebusby.com
Securing a mortgage in Seattle can a daunting task for those prospective homeowners unfamiliar with the many resources and experts available. I recently sat down with Carese Busby to discuss buying, lending, mortgages, and how you can gain a competitive edge to ensure you land your dream home.
Joe Patterson: Thank you for speaking with me today. I was hoping to talk about what it's like to get a mortgage in Seattle and what that process looks like. But first, tell us about yourself.
Carese Busby: I've been a mortgage banker for about 23 years—second generation in the business—and I work for Caliber Home Loans. Caliber is the number one lender in Washington State and the third largest non-bank lender in the country. We have a big footprint, which opens up a lot of options for buyers.
Joe: There are a lot of people right now looking to buy a house and many of them are wondering what the process looks like. They're also wondering how to choose a mortgage lender. What are some things these prospective homeowners need to look for in a lender?
Carese: That’s a great question. In lending, most people choose their mortgage banker or broker based on trust. It's a very high trust relationship; it’s important for buyers to feel confident in their lender and their real estate agent. It's not much fun to fall in love with a house only to find out you can't afford it or that you won’t qualify for it.
So, what I do first when someone approaches me, is educate them on the process. I found that when you educate potential clients, they are able to make the decisions that are right for them. They’re informed enough to decide if our partnership will be a good fit.
Anybody can quote you a rate. Rates are rates, they're market driven. That's why the quotes are out there: they want you to pick up the phone and call. And most lenders are going be pretty darn comparable. It all comes down to who you trust to hold your hand through the process and get you to the finish line smoothly, accurately, and with lots of communication.
And so, I always do an initial interview with every one of my clients. I want them to tell me about their fears, what they've heard, and what they want to accomplish during their home-buying process and with their mortgage. I really want them to share everything with me because then I know how best to counsel them.
From there, we dive into the pre-approval process, which is a thorough vetting of their financials, credit, etcetera. We do that because, here in the Seattle area or even just the Pacific Northwest, it's a very competitive market. And buyers, in many cases, are having to put themselves in positions where they have shorter closing timeframes. They are putting up larger earnest money and they're waiving different contingencies, like financing, for example. What I try to do is put the client in the best possible position to compete.
I create a pre-underwrite upfront, which is a thorough review of all their financials and credit. It’s the most thorough type of approval you can have going into an offer. Pre-underwrites are effective because, for one, it makes the buyer a lot more confident. The seller also feels more confident when looking to accept that offer. It also helps on the back end, because we've already done a good portion of the process up front. It allows for a smoother and quicker process when closing.
Joe: You mentioned meeting with buyers, are you doing this in person or virtually? What does that look like?
Carese: I always prefer an in-person meeting. Right now, a lot of buyers—due to their work schedules or, more recently, the corona virus—have chosen video conferencing. I like that. I really push for that initial video call or an in-person meeting just because I feel that it's really important. This is the largest investment most people are going to make in their life, so it’s important to me that I'm able to see that they really understood what I’m telling them.
Joe: With it being so competitive in Seattle, what are the things that you do to secure the sale? Are you able to call the selling agent and speak on the client's behalf?
Carese: Yes, absolutely. I consider myself a part of a team with the buyer's real estate and listing agent. If this is going to come together, we all need to work together to fulfill our promises to our buyers and our sellers. We also want to make this a great experience for the buyer and the seller. It's important that we all get on board together and have that connection.
Joe: So, say I'm representing a buyer and you're the lender and we win a competitive offer situation. What does that process look like after we've reached mutual acceptance? What exactly goes on behind the scenes.
Carese: As I always say, "That's when the exciting stuff happens!" Typically, I schedule a call or another video conference with the client as soon as they go into contract and I have a copy of that contract. I also reach out to Title & Escrow, because there's important documentation they're going to give me as the lender that I will need for the disclosures that go to the buyer. I then schedule a call with the buyer and that's where we discuss and finalize all those financing details. That's when we go over the final loan amount, what loan program they've chosen, and then we lock in the interest rate. Because, at that juncture, we now have a concrete closing date and that date, generally speaking, is going be within 30 days.
The market moves every day—rates fluctuate much like stocks do—so it's important that once a buyer is in contract, that we lock their rate. We do that because a lot can happen over a 30-day period. Markets ebb and flow. When you lock, you lock for 30 days, so that rate is guaranteed through that closing date. So, regardless of what happens in the market, the buyer is secure.
After that, we issue a nice big packet of lending disclosures, which is required by federal regulation. It includes a lot of different laws that lenders are under that we're disclosing to the borrower, like the Equal Credit Opportunity Act, Fair Housing, etcetera. It also gives them a breakdown of all those industry standard third-party closing costs in a loan estimate, which is important for them to view. It also gives them their estimated cash to close. Once they e-sign that, because that can all be done electronically, we order an appraisal. Appraisals can take anywhere from 10 to 14 days on a purchase. While we're waiting on the appraisal to come back, we're getting the loan file updated and ready to go back into underwriting for final approval. We're also going to need to have updated pay stubs and bank statements and the underwriter will re-review all of that.
Once the appraisal is complete, it meets up with the rest of the loan file and we get final approval. About a week before closing, we'll have final approval and issue something called a Closing Disclosure. What that is is a confirmation of all of the initial loan disclosures that the borrower signed at the beginning of the process. The Closing Disclosure gives the final breakdown in cash to close number for the borrower so they can start setting up their wire or cashier's check for escrow with their cash to close funds. It also gives them the time to ask any final questions and go through the documents so they're not rushed at their signing appointment.
Within the week, the escrow company will call them in to physically sign the loan documents in front of a notary. At that point, their money should be with the escrow company. The next day will be the official closing day. That's the day when the property gets recorded in the buyer’s name. That's also the day that you get to hand them their keys and they become the owners of the house.
Joe: With Seattle being such a competitive market, do you feel like Caliber gives your clients an edge?
Carese: It absolutely it does. Our clientele comes to us through referral and business relationships. I always want to be at a mortgage banking firm where I feel like I can offer my clients the widest array of loan products at the most competitive pricing.
I also like the fact that we have a stellar reputation in the real estate community. We are a trusted name. Agents recognize us, they know that if they accept an offer from a client that's been pre-approved at Caliber, we will prioritize that purchase and we are going to close on time.
Another aspect is when clients are looking for different options, there's a few different ways people can get their loans. They can go to a bank, but that's like shopping in one store. They're very limited, there's one set of guidelines, there's one source of money. Whereas at Caliber, we have the full gamut. We have multiple different money sources that we're pulling from and we have a larger array of expanded guidelines. Those guidelines can help a lot of clients that may not qualify for one program but do qualify for another.
The other two aspects that are really helpful in a competitive market is that our underwriting is handled locally. That's a big thing. The underwriters understand the needs and geographies of the market. We also put together our own appraisal pool and consumers don't necessarily realize why that could be a big deal. But here's why it is: when you go to a lot of the large lenders like Quicken or some of the big banks, they're using a national database of appraisers. So, there might be 2,500 different appraisers in that database. The order is going go to the first one that grabs it. You're getting the luck of the draw. Whereas my firm is a large enough company that we, per federal regulations, are able to set up appraisal pools in each of our offices. So, Seattle has its own appraisal pool, Kirkland has its own appraisal pool and on and on. These appraisers that are in our pool are geographically competent and have been thoroughly vetted. While we still can't choose the exact appraiser that will go out and appraise a particular order, we know who's in that pool and we're only going to assign them to appraise in an area that they have demonstrated they have expertise and experience appraising.
Joe: One more question regarding mortgages: you mentioned offering the full gamut of products and I think people sometimes don’t understand what that means. What type of product are you seeing that really comes in handy that maybe is a little different than your standard W2 or conventional loan program?
Carese: Well, every buyer is different: the buyer in Seattle will be different than the buyer in a market like Tacoma. What's nice is we've got the full product line. For example, I might have a first-time home buyer who wants the down payment assistance program through the bond—the state bond loans—and that's a product I offer. At the same time, I can also do a jumbo portfolio loan for a client that wants to buy a $5 million house in Medina; that's going to fall under a completely different type of loan product, but we do all the traditional loans, FHA, conventional, and the bond programs to the jumbos into the portfolio. And I think the portfolio really gives a lot more leeway to the more non-traditional borrowers.
We have a lot of entrepreneurs and self-employed people in Seattle. We also have people that own a lot of rental properties. And sometimes they fall outside those traditional tight program guidelines. That's where the portfolio money can come in really handy to place those clients. Due to the corona virus, a lot of portfolio programs have had major guideline changes, but they're still out there and we're still doing them. I know those guidelines will open back up again once the market settles down.
People need to always do what's best for them. And it's helpful if they’re armed with all the information that will help them make the best decision for them.