Q&A with Gregg Busch
Are lending policies improving since the days of “interest only mortgages” before this recession?
Lending guidelines since the onset of the mortgage meltdown are getting even tighter. The federal agencies, Fannie Mae and Freddie Mac, which most banks follow, have tightened the mortgage standards of the loan approval process. High credit scores are required for the best mortgage rates, income and assets are under the microscope, and appraisals are over-analyzed. On top of this, the mortgage industry is in a state of flux as the guidelines are evolving every day, making it challenging for loan officers and borrowers. All this as the industry is trying to get through the mortgage mess from the leftover bubble in housing. Once the housing market stabilizes and inventories go down nationally, we should see some loosening of the guidelines.
What is the average size loan for the Washington metropolitan market?
The average loan size in the Washington DC area is about $368,000, but that number should go up as the DC housing market continues to stabilize this year.
What’s the average turnaround time for a mortgage, start-to-finish?
The average turn time for a loan approval and closing really depends on the lender you choose. The banks are taking anywhere from 35 to 45 days due to the more cautious underwriting policies they have put in place since the mortgage meltdown, and independent mortgage companies like mine are taking anywhere from 21 to 30 days.
What do you recommend for a first time homebuyer?
Buying a home nowadays can be overwhelming, especially with all the changes in guidelines. The first thing a first time homebuyer should do is get pre-approved and see what he or she can afford. Find out the maximum that you can pay without feeling strapped on a monthly basis. Usually, the monthly payment, including taxes, insurance and monthly maintenance, should not exceed 33% of your gross monthly income.
Also, a borrower needs to look at how much can be put down on a property in cash, and if a first time homebuyer needs to ask an immediate family member for a gift to cover some of the down payment and closing costs. Lastly, you want to look at your investment. Check the selling prices of comparable homes and condos in the area. Websites such as Zillow and Trulia can give a general idea of what one should expect to pay. Also do a quick search of actual MRIS listings in the area on a number of websites, including the site of the National Association of Realtors. Lastly, hire a real estate agent to represent you.
Is it still considered to be a buyer’s market?
There are clear signs of strength in the DC area housing market as we see the statistics of under-contract and sold homes over the last quarter. Rates have been going up, which has gotten many buyers off the fence and serious about locking in a low rate. If a house is priced right, it sells within 30 days. If a house is overpriced it sits for some time, usually resulting in the seller dropping the price because the home becomes stale. This results in a net loss for the seller in the end. The Washington, DC area has one of the strongest job markets in the nation, resulting in one of the healthiest housing markets in the nation. I no longer think it is a buyer’s or a seller’s market.
Tell us a bit about yourself and your history in the Mortgage business.
I have been in the Mortgage business for over 20 years. When I graduated from George Washington University, I was working for a prominent stock broker, Julia Walsch, in an internship position. One of her clients was Ken Shannon, from Shannon and Luchs. He offered me a position as a loan officer with Sand L Mortgage, which he had just formed. We not only originated, but also processed our own loans, which was the best way to learn the business. From there it was history, as I had a passion for helping people get into their homes with the best customer service experience. Though, I must say that it has been a challenging last couple of years.
Do you have a favorite weekend getaway spot?
My favorite weekend getaway during the winter months is South Beach, Miami where I own a condo with my partner of life Brook Rose. In the summers we like to visit friends in Rehoboth, Delaware and the Hamptons on Long Island.
The Busch Team, one of the most productive teams at First Savings Mortgage, is a direct lender that processes, underwrites and closes their own loans locally serving DC, Maryland Virginia, Florida, Delaware, North Carolina MV area. Visit GreggBusch.com.