1/4% = $14 per $100k; Can Refi Guys Do Purchases? Automation?
Another reminder: a 1/4% increase in rates from 3.75% to 4.0% only increases payments about $14 per $100,000.
One of the biggest boons to my personal business over the last 20+ years was the advent of automated/online lenders in the late 1990s (E-loan was one of the first). The reason? They couldn’t do purchases. And for some reason, a lot of the fallout spilled over to me.
This is still the case. The automated refi shops (and loan officers) often can’t do purchases effectively b/c purchase financing requires expertise. No matter how good the technology is, the process requires people along the way with experience.
Ordering and reviewing appraisals; reviewing contracts; estimating closing costs; getting disclosures out quickly and accurately; spotting income, asset and credit issues up front; estimating “cash to close;” and answering the many Realtors and buyer questions all require substantial expertise.
As rates climb, the refi-guys will be coming out of the woodwork looking for purchase business. Similarly, purchases remain the holy grail for the big tech lenders. But, at least in California’s very complex markets, real people with real experience are a necessity.
Founder/Broker | JVM Lending
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