Home financing advice for complex times


By A.J. Kaufman, Managing Editor

As the Business Journal explores “Home Economics” and all facets of buying, selling or living in a home — along with the intrinsic value of home ownership — this edition, we sat down with leaders from some of the area’s most prominent financial institutions to discuss the current state of affairs. In a complex region such as the Appalachian Highlands, relying on experienced experts can be beneficial.

Michael Trippeer

Existing since 1934 with nearly a dozen Tri-Cities locations, Citizens Bank has its roots in Carter County. The bank’s Assistant Vice President for Mortgage Lending, Michael Trippeer, told the Business Journal that he’s noticed the custom home build becoming a trend in the Johnson City market.

“I have seen many folks that have sold a home and decided to use that equity to build the home of their dreams,” he said. “We are also seeing so many individuals that are new to the area that are competing for the homes as they come on the market.”

In terms of numbers, as we move toward summer, Trippeer has seen an uptick in applications, as folks believe that season is a good time to make a move. He notes that it’s largely due to the talk of lower rates as the year progresses. Trippeer thinks rates will “stay pretty consistent over the next few months.”

David Oiler, vice president for consumer lending, concurs on rates staying steady through 2024, although he says we “may see a little dip later in the year.”

David Oiler

Additionally, applicant quality sometimes arises when doing loans.

“I am seeing better quality for those that are ready to buy. I think this is because they have been down this road before, due to trying to purchase in this environment,” Oiler explained to the Business Journal in April. “Most have lost out on homes and are in a much better position now when looking to purchase. I am also seeing those that just need to have a conversation about what is involved to purchase a home. This involves taking them through a complete financial analysis of the process so they can see what it is going to look like.”

Trippeer observes some similarities with his clientele.

“In the Tri-Cities, the applicants I have seen are customers who have been better qualified to make a move,” he noted. “Education on credit and understanding of how mortgages work and the many different options, have many consumers in a better position to act when they find the right home or land for their next purchase. The education towards pre-qualifying has helped prepare folks for the biggest purchase most will ever make.”

Tammie Gravlee

When it comes to unpredictable interest rates, Trippeer says consumers always will be concerned about the current rate because “no one wants to pay more than they need to,” but Trippeer adds, “I think when you look historically you are seeing good rates. Some of the shock from the new average rate over the past two years seems to have worn off and consumers are realistic about the rates and the payments associated with those rates.”

With 21 branches, most of which sit across the Tri-Cities, where 100% of business decisions are made, the Bank of Tennessee is a locally owned and operated company. Mortgage Division President Tammie Gravlee sees some trends, primarily new construction requests, along with some cash-out refinances for loan trends.

“Most homeowners have a good amount of equity built in their current residence due to the market improvements and don’t want to lose the first mortgage interest rate, which is exceptionally low in comparison to years past,” Gravlee, who began her role in December, explained to the Business Journal. “Therefore, home equity line of credits and taking cash from current equity is the most significant trend we are seeing. Certainly, it is not a refinance boom as we have experienced in the past few years, but it is definitely a trend.”

On interest rates, she deems it a guessing game, as the year brings many obstacles, including stubborn inflation, 2024 being an election year, political concerns like border control, and wars abroad that bring complexity.

“Historically, election years have brought lower rates; this year, with the Fed comments changing each quarter, we are all feeling the uncertainty of how to forecast or plan for the rate environment,” Gravlee said. “Overall economic environment, e.g. housing shortage, job numbers and CPI are also areas unstable and will play a big part in forecasted rates…Regardless of how the market plays out, there will always (be), sad to say, a divorce, death, job transfers, etc., that will keep the housing market moving. It just may not be at the pace we have all gotten comfortable with before 2023.”

The public often wonders if it’s recommended that potential homebuyers get pre-qualified. Gravlee says that’s not a bad idea for borrowers for many reasons, even in a great or good market. She lists:

  1. No surprises with what a borrower can qualify for. Make no mistake; there can be many surprises when financing and purchasing a home. Products and qualifying have guideline changes very frequently; the secondary market controls these, and many things are taken into consideration when the rules change.
  2. A borrower will need to know how much they are qualified for, since geographic locations can change the value of homes. A borrower should ensure they are able to purchase in the area and be prepared for the price they can afford.
  3. Options that are available for grants they may not be familiar with would allow them to purchase a larger home than they originally thought they could afford.
  4. Most realtors will not show a house to a potential borrower unless they know they are pre-approved.

It’s all worthwhile advice, however, an announcement that March home sales posted their biggest decline in 16 months may thwart the momentum that allowed buyers to take advantage of slight rate declines early this year. Any rising mortgage rates could push buyers to the sidelines during the crucial spring home-buying season.

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