Featured Guest: Christina Whelan from Cornerstone Home Loans

The Maxwell team recently had the privilege of sitting down with Christina Whelan at Cornerstone Home Loans to ask how she built her business and advice she would give to new loan officers.

Christina Hi res2Maxwell: Real estate is a relationship-based business. What advice can you give to new or young loan officers who are starting to develop their referral network of trusted partners?

Christina: Yes, I agree, this business is highly-relational and it can take a lot of time to develop a network of really great partners. As one of the two primary quarterbacks in the homebuying process you [the loan officer] need to be working with realtors that truly align with your values so that both of you can deliver a great homebuying experience for your customers.

Start building your network with your natural connections and people within your office. This is almost always a good place to start because you have already established rapport and trust, and should be able to quickly determine if they are someone you want to work with on a continual basis.

Another way I build my network is through clear communication with sellers’ agents. If you are working on a deal and can communicate clearly, consistently and calmly with the seller’s agent it makes everyone’s lives easier. Often I get to the closing table and the seller’s agent is now eager to work with me again! Don’t forget, there are a lot of people in every transaction, so you need to deliver exceptional customer service to all of these people. If you can do this, your referral network will begin to grow naturally.

M: That is great advice. It is true that there are so many different moving parts and people in each transaction, so communication is critical. So when you are looking for new referral partners, what qualities do you look for in a realtor that make a good fit with how you do business?

C: I actually love to work with realtors who are also mothers. This may sound funny, but mothers can make great realtors because they naturally show empathy with their homebuyers, are often great with problem solving, and are good at remaining calm and collected if issues arise during the process. Obviously, I don’t work exclusively with mom’s but they often have exhibit these qualities, which I highly value in my realtor partners.

M: What is some advice you might offer to someone who is thinking about becoming a loan officer?

C: I would highly recommend that new loan officers work for a large, well established lender. These larger companies can provide a new loan officer with a great deal of training resources, and often have a very structured training program.

It is important for you to really get a grasp on the basics of lending as an agent through a program such as this before you move to a smaller office, which often doesn’t have the same amount of resources to commit to your training. You will also get exposed to a lot of different types of mortgage products, and it is so important that an agent have a good grasp on different mortgage options to truly serve and add value to their future homebuyers. Having a good grasp on basic fundamentals is key to growing your business down the road. Become an expert!

Don’t forget your job is going to be to educate your homebuyer with their options!

M: Are there any things that you do, which other lenders may not think about, which will help you grow your business?

C: I go to 100% of my closings! Even if they closing is a long drive I make sure I can be there at the table with the homebuyers. More often than not this is purely relationship building, but if for some reason there are questions or issues at the closing table I am right there. I already know the loan better than anyone else in that room, so we can quickly work through any things that might arise. Don’t forget, there is a very human side to this transaction, it can be so rewarding to sit with a homebuyer as they get the keys to their house!

M: Christina we really appreciate you sharing some of your advice with us, and our network of lenders.

C: Thank you! I could talk about the industry all day, so I’m always happy to answer your questions.

We always love meeting with Christina. She is a wealth of knowledge and always challenges us about how we think about building our business. Thanks Christina!
Christina has been opening the doors to homeownership for her clients for over 32 years across multiple states. In addition to being a very active loan officer at Cornerstone, Christina serves on the Board of Advisors for the Opportunity Coalition, which is a Colorado non-profit that provides leadership, collaboration and support to help grow businesses and create economic vitality.

Buying vs. Renting is Not Always What You Think

Last spring I decided to buy a house. I made 12 above-asking-price offers, threw out contingencies, and lost plenty of sleep before getting an offer accepted. I hadn’t even begun the mortgage process and I was already a wreck. I was sorely underprepared for the emotional rollercoaster and, like many of my peers in a similar situation, ready to throw in the towel when I finally had an offer accepted.

As much as I hate to admit it, the decision to buy a home was largely emotional. I had spent very little time evaluating the financial impact of continuing to rent versus buy. Homeownership is part of the American dream, so how could it possibly make more sense to continue renting?

Many of my millennial friends seem to leave the rental marketplace (some for good reason!), but few of us seriously consider the important factors that should be influencing our buy vs rent decision.

For most young homebuyers the thought of detailed financial analysis and spreadsheets is overwhelming yet the most neglected part of the homebuying process.  We would prefer to spend our evenings lusting over the most recent listings on Zillow and dreaming of the day our home will be a featured post on Houzz. Our lack of financial knowledge and apathy could have a huge financial impact on our lives, yet we largely ignore it!

Enter the “Rent vs Buy Calculator” published by UpShot. This is BY FAR one of the most comprehensive (yet easiest to use and understand) tools I’ve seen to compare the financial impact of renting versus buying a home.

For those of you considering a home purchase take an hour or two to work on this tool before you enter into the largest purchase of your life. Don’t waste your time with lousy affordability calculators on other popular websites.

Here are a few variables you will need to consider before buying a home (many of which I did not):

Initial Costs: For many cash-poor millennials this will be one of the most important variables to evaluate. This includes your downpayment and closing costs (aka cash at closing!). Don’t be afraid to ask your lender to explain their closing costs because they may seem confusing for a first-time homebuyer. You may be surprised to learn that you can get a mortgage with far less than 20% down, so a good lender is important to walk you through your options.

Recurring Costs: These fees can add up quickly. Condominium fees, maintenance fees, association fees, etc. Oh, and when the dishwasher breaks a month after you move in that expense is now coming from your pocket.

Tax implications: Buying a home can have significant impact on your taxes, so don’t forget to take that into consideration. (I got some money back from Uncle Sam, which I’ll be using to replace the fridge from the 1980’s).

Future plans: timeline, inflation, home price appreciation and other future plans may have a significant impact on your decision to buy vs rent.

So, as tempting as it might be to partake in the American dream of homeownership, take some time to evaluate your financial situation. You might be surprised, it could make more sense to stay with that evil landlord of yours for a bit longer!

 

Should 5-star reviews be a thing of the past?

Last night I rated the restaurant where I had dinner on Yelp, the Uber driver that provided me transportation home, and even my eye doctor who updated my glasses prescription with a glowing Google review. Everywhere I turn I am asked to provide feedback on the brands I interact with each day, and maybe it’s just my Millennial nature, but I never go anywhere or buy anything without first reading feedback from previous customers.

Admittedly, I gave the restaurant, the Uber driver, and the eye doctor all 5-star reviews because I was satisfied with the service I received, but now I am wondering if I could have been more helpful by providing them with a lower rating. Companies are often working hard to garner a 5-star online rating, but what if that badge of honor isn’t all that it’s cracked up to be? Could the golden mark be hurting your business?

A recent study out of Northwestern University found that, in moderation, negative reviews can actually boost trust and revenue for brands online. And contrary to what some businesses might think, products and services with ratings between 4.2 and 4.5 stars were more influential on positive consumer purchase decisions than those with the illustrious 5 stars.

So has the new generation of consumers lost their minds settling for sub-par brands? No, I would propose we are just seeing consumers’ need for authenticity and trust. Let’s be honest, as consumers we are each slightly cynical and realize nothing in this world is perfect (although I might make an argument for the Cole Haan shoes I recently purchased on Zappos). So when we can find any negative feedback online our natural reaction can be doubt and we think “What’s the catch?”.  

In an economy of online interactions and transactions (sometimes between complete strangers) consumers are demanding authenticity, so when brands have some mixed or negative (and hopefully constructive) feedback we feel more comfortable trusting them. We think, “Hey this company is willing to be vulnerable and transparent, and thus is likely more trustworthy”. Rachel Botsman’s TED Talk on the currency of trust is a great example of how our online economy has evolved to trust total strangers and brands in an increasingly-digital world.

So what, you might ask, should I provide sub-par service or a slightly-flawed product to get a few negative reviews? Absolutely not! Keep providing exceptional consumer experiences, but make sure your online reputation is authentic and in-line with reality. While it is important to have a healthy mix of positive and negative feedback online, don’t forget to emphasize some of the most meaningful top reviewers!

Let’s face it, nothing is perfect and not every transaction you work on will go 100% to plan. But don’t let that prevent you from asking for and sharing less-than-perfect feedback. Who knows, maybe a little criticism will yield a few more deals for you this year!

 

How to Win with Millennials for Their Mortgage

Millennials are the largest generation in America. Approximately 86M people were born between 1980 and 2000, meaning they outnumber the Baby Boomers. As the largest segment of homebuyers for three years running, Millennials are already a homebuying force to be reckoned with —

This new segment of homebuyers represents a  substantial opportunity for mortgage lenders. But it can’t be the same old way anymore. Lenders  will need to throw traditional processes out the door and get ready to adapt to the unique generational personality. Here are a few tips from the Millennial team at Maxwell:

  • Technology is great service. Does your website look like it’s from the 1990s? Does your mortgage process require endless forms with repetitive information? Do you require faxes or scans? Do you need wet signatures? Do you shun cloud storage, communication by text and elegant design? If you answered yes to any of these questions, you’re not ready to deliver top service to a Millennial.
  • Phone calls are a nuisance. Uncle George may appreciate getting updates by phone, but for most Millennials having to interact over the phone is actually a bother. Voicemails? Don’t even waste your time. When I can track my Uber car location through an app, my mortgage should be no different. Get used to this hierarchy of communication with Millennials:
    1. Text: Use sparingly. Action required reminders and quick response. Request for phone call (e.g. “Can you talk at 2PM?”). Big milestone updates. Expect 1-3 hour response time.
    2. Email: Long-form requests and education. Expect 3-5 day response time.
    3. Website or smartphone app: Self-service status updates, document exchange, task and document lists, main workflow tools. Expect 3-8 hour response time.
    4. Phone or Voicemail: Use for initial meet and greet and for pre-arranged conversations. Don’t expect a response to voicemails.
  • Answer the “why.” Most Millennials are first time homebuyers. Spend time up front explaining the mortgage process, rate structures and the documentation requirements. Simple definitions to commonly used terms will be helpful (e.g. What does it mean to buy a point? Why do I need title insurance?) Be prepared to answer questions patiently — Millennials will certainly have done online research before speaking with you and may have mis-set expectations. And finally, have technology tools they can use themselves to get to an answer.
  • Build an online presence. Unlike their parents, Millennials don’t trust referrals, they need additional peer validation of your expertise. This does not mean building a 5-star review profile online, it means opening yourself up to reviews by every customer, even the unhappy ones. A 4.5-star average with 75 reviews is more meaningful than a 5-star review with 25 reviews. If you’ve been in business for more than 5 years, you should have over 50 substantive reviews. If you came from an agent referral, expect that they’ll do their research before speaking to you
  • Be consistent, ethical and honest. Know what you stand for, be humble and open to learn. Millennials are looking for someone to trust and guide them through the most expensive purchase of their life — that means having good answers to common questions, taking time to explain something new, and also telling them your own story.

Millennials are changing the way businesses operate, but at the end of the day they want the same thing: great service, honest advice, and to make a home for themselves and their family. If you take the time to understand what makes them tick, you are already leaps ahead of the competition in winning them over.

Can I borrow from a friend to buy a house?

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A smart homebuyer recently used our Ask a Lender feature to ask an interesting question.

I’m buying a home with a friends cash (borrowed on a note) to remove the financing piece from our offer. How can I work with a lender in advance to secure refinancing after close? I’ll need to refinance the home to pay off my friend’s note. Can I do it without doing a cash-out refi? Another question would be, what is the best way to avoid doing 2 appraisals? One during the initial purchase, and one for the refi?

This got us thinking. If you are buying in a competitive market (e.g. Denver, SF, NYC) you have probably lost out on a home purchase to an all-cash offer. Sellers love cash offers because they don’t have to worry about the appraisal and a buyer qualifying for a mortgage. Cash buyers have a leg up and they can move fast.

If you are like most of us, you think, “who has $300,000 sitting around for a home?” Apparently, a lot of people do. According to CoreLogic, over 30% of all transactions are all cash. Three out of ten transactions is not insignificant, but does everyone really have the cash?

It turns out, there is a strategy for making a cash offer, even if you don’t have the cash. But, you do need to know someone with some spare change. Here’s how it would work for a $300,000 house, assuming you have enough cash on hand for the 20% down payment ($60,000).

  1. Reach an agreement with a friend to borrow $240,000. It’s important to formalize this in a legal document or a formal “note.”
  2. Purchase desired house for $300,000 (your $60,000 + borrowed $240,000). No mortgage involved!
  3. Find a mortgage lender and re-finance the property and pull out $400,000 of equity
  4. Pay off the loan from the friend
  5. Begin payments on your mortgage

There are lots to consider if you are going down this road. The amazing lenders Maxwell works with came through with fantastic responses. We’ve included them below (view on Maxwell). Do you have any questions you’d like answered by a loan officer? Feel free to ask a lender using Maxwell.

Lender 1

Hello, you can get pre-qualified for the cash-out refinance and yes, it would have to be a cash-out if you want to be able to pay your friend back. A cash purchase does not require an appraisal so you would only need one appraisal for the refinance. Hope that helps!

Lender 2

The note needs to be recorded by the title company at the time of closing and placed against the house. Then when the refinance comes into play you are just paying off the recorded note and therefore it would not be a cash out refinance. There is no way to get around the appraisal issue for the refinance, unless perhaps the file is opened without any income information and an appraisal ordered that way by the lender. Then the refinance completed within 90 days of the appraisal would probably work.

Lender 3

These are good questions. I would consider having a note filed for the funds being used to pay cash for the house as this could allow the refinance to be a rate and term refinance if done right, instead of a cashout refinance. It is possible to go ahead and have your credit, income, and assets approved up front so that after you buy the house you can move as quickly as possible on the refinance part of it. It is possible to go ahead and have an appraisal ordered through the lender, depending on what loan type you go with, that is good for 120 days. This could then be used to make sure you are getting a market value now for closing and be able to then be used for the refinance. Another option is your friend could pay cash for the home and you could then purchase it from your friend for cash. This may be an easier way to do it depending on what you are trying to accomplish. I would be happy to go over this with you in more detail.

how to choose a great loan officer

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Turn on your TV and it’s hard to miss the ads for mortgages and refinancing. As the dollar signs roll by, promising low rates and more savings, you can’t help but wonder: what’s the catch?

Our founding team has bought and sold over 20 homes. That’s a lot of mortgages. What we’ve learned is that there often is a catch. Work with the wrong person and you risk missing your closing date or, even worse, losing your dream house. You could get treated rudely and completely fleeced at closing, when you have no choice but to sign on the dotted line. Buying a home is complex and emotional – the last thing you need to be asking yourself is if you can trust the loan officer on the other side of the table.

It’s one of the reasons we created Maxwell: to help homebuyers like us connect with reputable loan officers who work and live in our communities. As we’ve built the company, we’ve come to admire the great loan officers we meet. They manage countless details of your loan, not to mention frequent regulatory changes, tight timelines, and demanding customers.

We have a few tips on how to cut through the syrupy slogans and smiling faces. In fact, these are the five factors we ask every homebuyer on Maxwell to evaluate the loan officers they meet through our platform:

  1. Communication: When you get a mortgage, the lender will dig into some of your most intimate financial details. After all, you’re asking them to give you hundreds of thousands of dollars. Christina Whelan, one of our loan officers from Cornerstone Home Lending, says it best: “I may be asking a homebuyer for a lot, but I also know it makes them uneasy or it comes as a surprise. I’ve been doing this for over 30 years, but I always take the time to explain to the homebuyer why we need certain information and how it’s going to ultimately help them get into their home. I keep them and their agents up-to-date so they’re never in the dark.”
  1. Responsiveness: It’s 5PM on Saturday. You just walked through your dream home and want to move on it before anyone else does. “Nights and weekends? Of course,” says Taryn Bellavance one of our loan officers at Eagle Home Mortgage. “I know that’s when my homebuyers are making decisions together and may need my counsel. Email, text and phone me any time. Then let’s work hard to close on that financing as quickly as we can!”
  1. Organization: A loan officer tracks a lot of moving parts – documents, processes, regulations, rate trends, financial details, and third parties like appraisers. “Being a loan officer is a little like sitting in a cockpit – there dials, switches and flashing lights,” says Frances Wehner at SWBC Mortgage in Denver. “If we’re going to hit that closing date, it’s my role to understand what’s happening and make sure it all happens at the right time, with as little turbulence as possible!”
  1. Knowledge: One of the reasons a loan officer is so important is that home financing is just so complex. You’ll want someone like Mike Heldt from American Pacific Mortgage managing your mortgage. “Homebuyers don’t want to hear a bunch of big mortgage words and acronyms like 203K, CHFA, FHA and 1003,” says Mike. “They want to buy a home and I get to help them meet their needs with the best program. My favorite part of the job is understanding a homebuyer’s goals and dreams and then making sure they are comfortable with the mortgage offering we select. I’m not just helping them buy a house. I’m building lifelong trust.”
  1. Advocacy: It feels like it takes a village to buy a house. Listing agents, buying agents, inspectors, loan officers, underwriters, appraisers, processors, title companies, and government officials. Who is on your side? “I’m on your side,” says Nick Stewart from Liberty Home Loans. “You’ve saved money for years and dreamed of owning a home. I’m here to help make that happen. I regularly go-to-bat for my customers to take the pain out of the homebuying process. Sometimes we just need a creative solution to a big question. I really enjoy it!”

At the end of the day, it’s really hard to know anything about the guy at the other end of that TV commercial 800 number. Especially along the dimensions we outlined above. When you use Maxwell, you get to pick the loan officer that meets your needs. You can read reviews from other homebuyers, check out their endorsements from local real estate agents (and even your agent), and select a loan officer who will knock it out of the park on all five of the dimensions above. It really is that simple!

why a good loan officer matters

Business project presentation on digital tablet

Business project presentation on digital tablet

“I am going to throw up” was the only text in an email forwarded to me from James (name changed). I got this email two months ago, as we were preparing to launch Maxwell. It reminded us of the importance of working with a great loan officer.

When he started looking for a home, James, was excited about the prospects of home ownership. He looked forward to a place he and his young family could make their own. Fast forward 40 days later and feels of hope have been replaced with the feelings of nausea.

James sent this email because he just learned that his closing would be delayed – for the second time. When the original closing date was set, he arranged (bought plane tickets!) for family to help with the move and some home repairs.
This all could have been avoided if James’s loan officer would done a better job communicating issues. As an example, James received this email only a day before closing…

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If you are playing at home, that’s eleven requests that James’s loan officer made a day before closing! Almost all of these questions could have been answered well before this point. Great loan officers surface issues in advance and help you gather the information needed.

Most of us start to shop for a mortgage online – 70%, up from 0% 20 years ago. While shopping is a great idea, the internet can let you down in a couple of key ways:

  1. The interest rates you see online are marketing rates and not personalized to your situation. Depending on your financial situation, you may get a rate lower or higher than what you find online.
  2. Most shopping compares only rate and not the reputation and quality of the loan officer. James got what he thought was a good rate. It turned out he worked with a less than stellar loan officer and this ended up costing him in the end.

Maxwell is a mortgage marketplace with the best loan officers. If you’re using Maxwell to find a great loan officer, you’ll be able to read reviews and see how many real estate agents have endorsed a loan officer.

If Maxwell isn’t available in your area (yet!), talk to other home buyers to see who they would recommend.

Buying a home is the largest purchase of your life, plus it’s complicated. Find a loan officer that is well respected in the community and can help you navigate this process.

why you should shop for your mortgage

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We shop for almost everything. Why don’t we shop for home loans? Most homebuyers don’t, and the cost is significant.

Let’s take a quick walk down memory lane. Close your eyes and think about 1996. Remember what it was like to buy things from a store? To actually have to drive or walk to a physical place, pick an item and exchange money (maybe even in cash!) for an item.

In 1996, I remember buying a TV. It looked something like the picture below. I was proud of the questions I asked the salespeople and the $600 I paid. I drove around to several different stores (Sears, Circuit City and Wal-mart) to learn about different TV technology. I ended up not just saving $100, but getting a lot of great knowledge about TVs.

Ok, now let’s hop back to the present. Reading reviews and comparison shopping has become a staple of life in 2015.  Most large online retailers include product reviews and even include prices of items from other sellers. In physical stores (if you still go to those), you can use a comparison tool like RedLaser to save a few nickels on your granola or find out what other granola-eaters thought about it.

We read reviews and compare everything from cereal to cars, so surely you would do the same when making the largest purchase of your life. Right?

Well…not exactly. Most homebuyers (over 50%) do not shop for their mortgage. Researchers Susan Woodward and Robert Hall found that we’re leaving money on the table by not getting multiple quotes for our mortgage. (We read the whole paper, Diagnosing Consumer Confusion and Sub Optimal Shopping Effort: Theory and Mortgage-Market Evidence, so you wouldn’t have to. If you want to check it out for yourself, coffee up, grab your stats textbook and click here.) We would also tell you that by not finding a great loan officer, you’re also setting yourself up for a lot of frustration.

What’s it worth to you?

If I posted a hypothetical job on Craigslist – see below, would you take it?

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I’m guessing that you would. A couple of phone calls for $2,500 is a no brainer. But why don’t we shop for a mortgage? Or even compare the reputation of two people that were referred to us?

To quote from the paper: “…with $200,000 principal, the savings [from getting quotes from an additional one or two brokers] are $1,866 and $2,664 [respectively].

Wow — over $2,500 on a $200,000 mortgage is a lot of savings. And many of us have mortgages well north of $200,000. There’s even more at stake if your mortgage is, for example, $400,000.

Harder than it looks

Back to the question. Why don’t we shop for mortgages? The biggest reason is because it’s difficult to shop. To get an accurate quote, you would need to share documents that allow a broker to get a better picture of your financial situation. Imagine sharing your W-2s, pay stubs, bank statements and taxes with multiple mortgage brokers. It takes a lot of trust have your personal information in the hands of multiple people. If only there was a tool like Redlaser for mortgages.

Meet Maxwell

We created Maxwell because we were frustrated homebuyers. Technology exists to read reviews and comparison shop in almost every area of our lives. Why should mortgages be any different?

Would you choose the most reputable loan officer who gave you his or her most competitive rate? We sure would.

Maxwell makes it easy to shop and get the best mortgage from a great loan officer. Maxwell helps you to collect the documents lenders care about upfront and then we anonymize your information. We share the anonymous version with great loan officers and they make their best offer to get your business. This way you can be in control of your information.

Once you select the loan officer you want to work with based on her reputation with borrowers and realtors, you authorize her to see your original documents. From there, you’re off to the races on closing your loan.

Maxwell is not a mortgage broker or a loan officer. Just like eBay is not a store and Airbnb is not a hotel. We just make it easy for you to shop and find an incredible professional to guide you through the most expensive purchase of your life.

It’s the mortgage experience we want as homebuyers. Simple, intuitive and human.

If you’re looking to buy a home or refinance soon, we’d love to help you save.

Click here to get started.