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