Mortgage Industry Changes & Employee Relocation
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The Mortgage Industry Has Changed: Are You Regulation Ready?

07 Mar The Mortgage Industry Has Changed: Are You Regulation Ready?

The new mortgage regulations that hit earlier this year sent a ripple of concern Relocation mortgages issues can be complex. Talk to a relocation mortgage specialist to review your employee relocation policyto those in the market for a home loan –specifically relocating employees and their families.

Questions such as “How will this impact my relocation?” and “Will I qualify to purchase a new home if I haven’t sold my existing home?” are commonplace.

But in the midst of changing processes and more stringent lending criteria, your company help relocating employees be better prepared. To start with, your human resources department can use the following three mortgage tips for relocating employees to help ensure they are “Regulation Ready”:

Step 1: Review Your Company Relocation Policy

Understanding your benefits and the impact those benefits will have on your ability to purchase is critical. With the new Qualified Mortgage “debt-to-income ratio” of 43%, so this means knowing whether you have a Guaranteed Buy-Out, Buyer Value Option, or Direct Reimbursement home sale benefit is a must in determining whether the relocating employee’s current home payment is factored into their “debt-to-income ratio”. In addition, your company’s relocation policy should outline any purchase benefits relocating employees are eligible to receive. If you are working with a corporate relocation management company, such as NRI Relocation, then your Consultant is a great resource to tap into. He or she will be able to review your relocation policy to ensure your company’s relocation benefits are comparable with the market and compliant with the most recent mortgage rules.

Step 2: Talk to a Relocation Mortgage Specialist

Lenders are now required to do a lot more to get a loan approved. What this means to your relocating employee is more documentation may be required. Make sure your employee knows which documents will be required before they pack their household up. Also, due to new appraisal review period guidelines, there may be longer delays in closing than in the past. Speaking with an experienced relocation mortgage specialist will not only give you a better understanding of the process, but will also help you and your relocating employee to set realistic expectations when determining your transfer timeline.

Step 3: Help Relocating Employees Get Pre-Approved for Mortgages

Competition for homes has risen dramatically in hot markets. It is now more common for relocating employees to find their perfect home, only to discover they are one of many in a long line of multiple offers. And savvy sellers are no longer simply assessing highest and best offers; they are also looking closely at which offer presented has the most qualified buyer.

With such competition out there, having a standard pre-qualification letter is not enough to guarantee quick acceptance of an offer. Programs such as Mortgage First*, offered by Quicken Loans, allows the employee’s loan to be fully underwritten before they even find a house. The process is much faster and removes road blocks early which can give them – and your company – a competitive advantage!

Following these these three steps will help relocating employees or transferring employees better prepared to use and understand the home-buying portion of your company’s relocation policy, and avoid disappointment, confusion, and delays.

You can also learn more about how the changes in the mortgage industry impact relocating employees, in NRI Relocation’s video: Talk Relo: Mortgage Industry Update

About the Author: Paula Keats-Ward is the Vice President of Operations at NRI Relocation, a full-service employee relocation management company.

*MORTGAGE FIRST is a service available exclusively from Quicken Loans. Quicken Loans verifies the home buyer’s income, reviews credit, and underwrites the proposed loan without an identified property. Not all properties are eligible. Once a property has been identified and approved, Quicken Loans may issue final loan approval. The interest rate does not lock until a contract is entered, and so rates may change without notice. Other conditions and restrictions may apply. No loan will issue without buyer’s provision of insurance, an adequate appraisal, and clear title. This advertisement is not an offer to lend, and does not empower you to accept any loan agreement. MORTGAGE FIRST terms and conditions may change without notice.
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