Mortgage and Real Estate Advice- When You’re Not on Solid Ground

May 3 2020

By: Elizabeth Diaz

The housing market is a big part of what drives the economy.  As reported in The Eyes on Housing, “With businesses starting to slowly open back up again in some parts of the country, it’s important to understand how housing can have a major impact on the recovery of the U.S. economy. 

In this article, I reached out to an up-and-coming superstar in the mortgage business, Zephan Gilani, who also happens to be in the thick of the coronavirus-19 pandemic in New Jersey.

“I just had a client who was only 31 with 3 kids. He did close on his house. He was mid-renovating it for his family and passed away after slipping into a coma due to COVID with no underlying conditions, not being able to spend a night in the house with his family. So I really understand how difficult this can be to live with and navigate,” he sincerely said. 

Gilani is licensed in New Jersey, Florida, Pennsylvania and pending New York. He definitely has his pulse on the beat of the up and down mortgage rates, tips to prepare for the mortgage process in this crisis, and what he thinks about the future in the housing industry.  

Gilani began in the IT industry but guided by Muscarella, he quickly jumped into the mortgage business with a passion. He also has terrific talent for the social media and the virtual reality arena that can be beneficial for us all to learn. He offers great advice for marketing to who he knows is “the upcoming, first-time homebuyers, Millennials,” Gilani strongly points out.

Gilani said, “It’s remarkable how people can be in denial. People are dying, that’s a given. But on a positive note we have historically, all-time, low rates which for some people can make a huge difference at this difficult time.”

“I just had a client who was only 31 with a wife and three kids. He did close on his house. He was mid-renovating it for his family and passed away after slipping into a coma due to COVID with no underlying conditions, not being able to spend a night in the house with his family. So I really understand how difficult this can be to live with and navigate,” he sincerely said. 

“Between the months of March and April it was a game of whack-a-mole,” Gilani continued. On March 9th, I had locked in 15 loans at 3% and lower. It was a historic day with the lowest rate but it crashed FHA loans and the secondary market. After that date the rates have been changing constantly, hour but hour.“

“I’ll never forget it. It was a Monday, about the third or fourth week of March, the rates dropped to 3.375%.  That’s a very sexy rate so I called many clients and potential clients to let them know.”

“By noon the rate spiked up and when the clients called back I had to give them the news.  It wasn’t a good look. The rates change every hour, Monday through Friday based on the FHA government-backed loans and the secondary, conventional loans backed by investors.  The volatility caused FHA opportunities to dry up and crashed the secondary market.”

As Gilani explained, “It’s never been this way. We’re dealing with very uncertain times as well as the most volatile market in history.”

“Currently we tell people rates are historically low and we monitor them constantly like a heart monitor. People who are paying over 4.5% right now, if you correctly navigate there are savings to be had using different strategies.  People need the guidance now more than ever.”

Multiple sources and realtors are reporting that people aren’t listing their homes unless they absolutely have to because they don’t want the listing sitting on the market for 45 days or longer and have to sell it at a lower price, for example.

Gilani agreed and added, “We’re hoping that once in-home testing becomes more reliable, we will see a real influx of listings on the market.  As the economy slowly begins to open, the real estate market is also expecting to see a tsunami of listings and a vibrant market.

As Gilani explained, “Prior to the pandemic I’ve gotten as low as a 580 credit through the door. Until recently, it has become very strict. For example, the FHA market did shut down for several weeks yet it has come back and rates are low but minimum credit ratings are higher than they’ve ever been. People with credit scores at 700 plus will instantly receive lower rates that are incredible. Other than that it’s going to be difficult and you’re likely to pay points. Prior to COVID-19 a 620 score was the minimum for an FHA loan.”

“What lenders are looking for now are people who pay their bills and that’s basically all credit ratings are. Sometimes it blows my mind that people get mad at me for their credit scores. Nine times out of 10 it’s that they just didn’t pay their bills or missed a payment. It tells us you’re not worthy of paying us back. Some people are shocked that we ask ‘for so much documentation’ but it’s really not that much. Basically we require two years of W-2s, two forms of identification, 30 days of pay stubs, two years of taxes, and two years of bank statements.”

Gilani explained that you have to be working at the time of the closing. “If you don’t have a job, your furloughed or unemployed, you cannot close.  Honestly, if you have to sell then sell but just know that people are going to come at you, barter with you and possibly take advantage of you during this pandemic.”

“For those who are working if you’re paying over 4.5% on your rate, you should refinance because it will give you some money. There are several ways to strategize and save money doing a refi which could get you possibly $2,000 at closing and save around $200 a month. Right now that’s very important to a lot of people. Credit card rates are at least 14.99%. If you strategize and use your money to pay down debt, that’s drastic savings.”

“There is a lot of opportunity and while people are stuck at home, it’s a great time to reflect on how you can reduce your monthly obligations and liabilities. Think about how you can increase your monthly cash flow. Your first step is to talk to a mortgage lender and let them help you.“

Another industry leader Robert Dietz wrote for The Eyes on Housing, “Buying a home is a driving financial force in this process. Today, many analysts believe one of the first things we’ll be able to safely bring back is the home building sector, creating more jobs and impacting local neighborhoods in a big way. 

Dietze added, “The pace of new home sales will post significant declines during the second quarter due to the impacts of higher unemployment and shutdown effects of much of the U.S. economy, including elements of the real estate sector in certain markets. However, given the momentum housing construction held at the start of 2020, the housing industry will help lead the economy in the eventual recovery.”

The National Association of Home Builders (NAHB) notes the impact new construction can have on the job market:

“Building 1,000 average single-family homes creates 2,900 full-time jobs and generates $110.96 million in taxes and fees for all levels of government to support police, firefighters and schools,” according to NAHB’s National Impact of Home Building and Remodeling report.

Realtor Paula Dysle, MBA/Realtor with RE/MAX Bayside LLC in Apollo Beach, Florida, shared this information to help readers see the optimistic outcome experts are predicting.  

She added that the bottom line is, “Buying a home is a substantial economic driver today, and when new construction picks back up again, it will be an even stronger recovery force throughout the country. If you’re in a position to buy a home this year, you can have a significant impact on your local neighborhoods and safely make the move you’ve been waiting for. It’s a win-win.”

Gilani affirmed that, “Now is the best time to buy or consider refinancing. Historically rates are the lowest they’ve been.  Find people you trust and you will have a great outcome.“

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