The housing market around Southern New England is still recovering through a post-Covid pandemic shortage. Although the number of homes throughout Rhode Island have increased to over 1,000 available (1,200 at press time), the range of units to deem it “balanced” ranges between 3,000 and 5,000 units. The current situation translates into the market still favoring sellers, with purchasers looking for options to gain an advantage during the home-buying process.
One point many people fail to realize is needing to know what they can afford. They need to speak with a mortgage lender. Someone who listens to the client, runs the data provided, and determines a range that fits into their budget and needs. Armed with that information, potential homeowners can start looking at places that are within reason.
Dan Kenyon, Senior Loan Officer of Embrace Home Loans in East Greenwich helps buyers with that important first step toward home ownership. He said sitting down with the principals to find out what would make them happy
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Kenyon said a little research, staying within a budget, and having their finances in order can also factor into what happens next.
“People need to have realistic expectations when they are considering buying a home. There are several factors that contribute to this. Where do they want to live? How much are they willing to spend? What have they saved as a down payment or to make renovations? They need to have some ideas about these things so I can give them relevant information for them to adequately prepare them for the next steps,” Dan said.
Another determining factor is the applicant’s credit score. Building credit over the years is important, but being able to pay debts on time and not defaulting on them is crucial. Dan said there is a misconception people can not get qualified with bad credit. He said while it does create more obstacles, there are programs that can address them over time.
It’s about making the right decisions first, he said.
“If you either max out your credit cards or just pay the minimum on them, then your credit score won’t be favorable. Making a large purchase such as car can also negativity impact your credit score. That will get looked at as a liability because it is another expense that the client may not be able to afford over time,” he said.
In his 15-plus years in the mortgage industry, Dan estimates that he has completed over 1,100 transactions, ranging from refinancing to first-time mortgages. He said the changes from his first transaction—for which he was still leaning the process—to ones he performs now are completely different. He cites figuring out what the obstacles might be during the early phases of the application as a big hurdle in streamlining the process. At first, the process often took longer than 60 days. Today, the average transaction takes 30 days for purchases and 20 days for refinancing applications.
Also noteworthy, Dan said he entered the field after the housing market crashed in 2008-2009. He said the indistry lacked the proper protocols and safeguards to prevent the crash from occurring. Dan added the housing market at that time had many homeowners who were approved for mortgages that they were not qualified to have. When the rates increased, those homeowners were unable to pay the higher amounts, which resulted in a massive surge in foreclosures.
By the time Dan entered into the industry in 2010, new provisions were implemented to tighten the regulations and provide more accountability. He said that meant changes regarding how the industry conducted its business.
“It was like the Wild West in terms of lending to people back then,” Dan said. “Predatory lenders would promise would-be buyers attractive terms that in hindsight, were unlikely not sustainable. That caused the housing market bubble to burst. When it did, those who were in that situation found themselves homeless.
“It is important to know what you are signing up for first. I take the time and effort to make certain the client knows what to expect,” he added.
His advice for those looking to embark in home ownership? Speak with a mortgage broker to understand what the process entails, have the documents available, and be flexible. There are many federal programs that people can qualify for that offer no money down, a lower interest rate, or offer other incentives to encourage the client.
“A good client for me is someone who is open to options, who is committed to the process, and isn’t going to waiver once the process begins,” he said.
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Embrace Home Loans is located on 620 Main Street, Unit #1, in East Greenwich. They are located in 40 states, primarily on the East and West Coasts.
For more details and/or to schedule an appointment, please contact Dan at 401-378-0441/cell, 401-344-3548/office, or Dkenyon@embracehomeloans.com.
